The Indian economy is expected to grow by 7.1-7.6% in 2022. Is the Indian economy currently experiencing the fastest growth in the world?

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Despite changing geopolitical conditions around the world, a July 13 survey predicted that India’s economy will grow at a rate of 7.1-7.6% in the current financial year. Leading consultancy Deloitte India said in its July 2022 economic forecast report that while optimism was present at the end of 2021, it was shaken by the Omicron disease outbreak and the Russian invasion of the Ukraine in February.

Indian economy expected to grow 7.1-7.6% in 2022

The Reserve Bank of India forecasts GDP growth of 7.2% for the current fiscal year, which ends in March 2023. (RBI).
According to Deloitte India, supply chain disruptions and inflation are expected to last for a long time.
Before the new year, the local currency will mostly regain some of the ground it lost to the US dollar. The Indian rupee will continue to grow due to the global economic slowdown and India’s relatively robust recovery, it was predicted.

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India’s economy is mainly driven by domestic demand, with consumption and investment accounting for 70% of the country’s total economy. Many investments and breakthroughs in economic sectors have been undertaken as the economy has recovered from the shock of the COVID-19 pandemic. According to the World Bank, India must continue to give high priority to reducing inequality while adopting measures that would promote economic growth. Additionally, some progress has recently taken place in the country, some of which are described below:

  • The consumer price index (CPI) recorded an inflation of 7.01% in June 2022 against 7.04% in May 2022.
  • Till July 21, 2022, the outflow of foreign portfolio investment (FPI) reached Rs. 228,862 crore ($28.65 billion).
  • In addition to direct payment from MSP worth Rs. 2.37 lakh crore ($31.74 billion) to 163 lakh (16.7 million) farmers, 1208 lakh (120.8 million) tons metrics of wheat and paddy would be provided for purchase of wheat in Rabi 2021-2022 and estimated purchase of paddy in Kharif 2021–2022.
  • The main contributors to the Industrial Production Index (IPI), which reached 137.7 in May 2022, were the mining, manufacturing and power sectors.
  • One of India’s most promising economic characteristics is its young population: according to census data, around 41% of the population is under 20 years of age.
  • Banks want to reach this broad consumer base, and there are several ways to do this. According to Morgan Stanley, India’s mortgage-to-GDP ratio of 9% in 2016 would increase to nearly 17% by 2026. Real estate sales in the economy are expected to increase by 14% annually from 2016 to 2020 and 18% per year. from 2020 to 2025 due to wider access to money.

These are some of the great projects that have helped the Indian economy to continue to grow economically.

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Is India currently the fastest growing economy in the world?

Rising commodity prices, soaring inflation, supply constraints and shifts in the global geopolitical landscape are hampering growth forecasts, but India’s economy is also seen as the growth economy fastest in the world in this scenario.

India’s forecast was 7.5% previously but has now been revised to 7.4%, down 0.8%. According to the IMF, India’s revision mainly reflects unlikely conditions and faster policy tightening.

Despite the updated projection, India’s economy will be one of the largest in the world with the fastest growth rates in 2022-23 and 2023-24.

India currently ranks third in the world in terms of PPPs, with a 7% share of global GDP, behind China and the United States, according to Michael Debabrata Patra, deputy governor of the Reserve Bank of India (RBI). ).

He predicted that India’s economy would overtake the United States to become the world’s second largest economy by 2031 if it maintained its current growth rate of 11% over the next ten years.

India’s economy has new potential thanks to the dynamism of its digital ecosystem, the diversification of global supply chains outside of China, and increased investor focus on sustainable finance.
The economy is expected to see the world’s fastest major economic growth after leaving pandemic concerns behind and growing at a rate almost twice as fast as China’s for the second year in a row.

Inflation News: Inflation Biggest Concern 2022-23: India Inc - The Economic Times

Some inflation is unavoidable when fuel prices rise globally, leading to an increase in the economy. However, a competitive market generally forces companies to absorb most of this cost in their profits. Without this competition, companies would have an easier time passing on higher prices to customers.
Asia’s third-largest economy is actually getting bigger once again, and it’s doing so faster than most major countries. Despite a setback in recent weeks, its stock indices, like the Sensex and Nifty, are at significantly higher levels than at the start of 2021.

However, many economists warn that these encouraging signs hide a serious problem – some have even called it a crisis – that India faces as 2022 approaches.

edited and proofread by nikita sharma

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