BENGALURU (Reuters) – India’s economy will slow sharply this financial year as a slowdown in the global economy hampers domestic growth prospects, according to a Reuters poll.
The expected economic expansion will be faster than other major economies but below the long-term average.
Growth in Asia’s third-largest economy is expected to slow to 6.0% in the fiscal year to the end of March 2024, according to a Reuters poll of 45 people conducted April 10-19. , which likely grew 6.9% in the last fiscal year, unchanged since the March survey. economist.
The Reserve Bank of India’s forecast for the year was 6.5%. Opinion polls had a wider range of predictions than last month.
All respondents to the latest poll expect economic growth to slow significantly this year, with the most optimistic forecast at 6.6% and the weakest forecast at 4.4%.
Kunal Kundu, India economist at Societe Generale, said: “India’s real GDP is expected to slow significantly in FY24 as pent-up demand drives a technological recovery following the severe contraction associated with the pandemic. ‘ said.
“We believe that domestic demand will only marginally support economic activity and not drive growth. will remain fairly subdued.”
Rate hikes by the RBI since last May could also affect growth this year. The central bank has hiked interest rates by 250 basis points and now expects a prolonged moratorium to last at least until the end of the year.
This is despite inflation being well above the RBI’s medium-term target of 4.0%.
The median poll showed inflation at 5.3% this year, slightly above the central bank’s forecast of 5.2%, and next year’s 5.0%.
Nearly all respondents to the follow-up question (18 out of 19) said the risks to their inflation forecasts this year are higher than they are today.
“We believe oil prices are likely to average higher than the RBI’s estimate of $85 a barrel, which could put upward pressure on inflation,” said Sakshi Gupta, chief economist at HDFC Bank. It pointed out.
(For more articles in Reuters’ long-term global economic outlook poll package)
(Reporting by Madhumita Gokhale; Poll by Anant Chandak, Devayani Sathyan, Veronica Khongwir; Editing by Sharon Singleton)