Despite global headwinds such as synchronous policy tightening by central banks, high inflation, Russia-Ukraine conflict, the Indian economy is likely to surpass 7 per cent GDP growth in this financial year 2022-23
Economic activity in recent months has shown steady momentum on the back of positive consumer demand, decelerating price escalations and diminishing global economic uncertainties, said Saket Dalmia, President, PHD Chamber of Commerce and Industry on Thursday.
In a press statement, he said that the PHDCCI economy GPS index for December 2022 remains steady at 140.7 as compared to 140.7 in November 2022 and 145.5 in October 2022 due to buoyancy in consumption patterns and softening inflation.
“As the GPS index is in a steady momentum and holds significant correlation with economic growth, we expect FY23 GDP growth to surpass 7 per cent, said Dalmia.
Demand trajectory in the economy remains intact as passenger vehicles, with compact cars and utility vehicles, grew 2,76,000 in December 2022 from 2,53,000 in December 2021 marking a whopping around 9 per cent year-on-year (YoY) growth as compared to December 2021.
Dalmia added that the supply-side indicator, GST, is showing robust performance as the gross GST revenue collected in the month of December 2022 at Rs 1,49,507 crore is 15 per cent higher than the GST revenues in the same month last year.
The policy environment in the country remains attractive as the sequential growth of SENSEX (average of daily close) has shown month-on-month (MoM) growth of 0.2 per cent in December 2022 as compared to its corresponding value in November 2022.
The pace of economic activity showed momentum on the back of strong demand side, supply side and investments supported by the various structural reforms undertaken by the Government during the last 3 years.
Dalmia said, “Despite global headwinds, we are hopeful that economic growth will surpass 7 per cent in the current financial year supported by the resilient demand conditions and improving supply side. RBI recently started slowing the rate hikes with a hike by only 35 basis points to 6.25 per cent in order to control retail inflation and maintain economic growth,” said Dalmia.
Going ahead, continued hand holding by the government is required to mitigate the impact of recent geo-political developments while maintaining a balance between inflation and economic growth, he added.