Growth estimates for India have already been downwardly revised. With the entire world facing the spectre of unprecedented recession in 2023, India still stands like an oasis in an era of uncertainty
The State Bank of India in a report on Wednesday said that new investment announcements in quarter one of the financial year (FY) 2023, had declined to Rs 4.35 lakh crore as compared to Rs 5.75 lakh crore in Q4FY22.
However, as per provisional numbers in Q2FY23, the same has increased to Rs 7.73 lakh crore with a major contribution from Vedanta for its display unit and Semiconductors fab in Gujarat worth more than Rs 1.50 lakh crore.
The bank said that major industries where new announcements were made during Q2FY23 include electronics, roadways, shipping infrastructure, basic chemicals, metals, real estate, community services and non-conventional power etc. Thus growth has continued to stay robust.
“Even as the Indian economy has been able to navigate through the crisis, global uncertainties are beginning to take a profound toll. Specifically, the US credit markets are now increasingly appearing jittery,” the report said.
The trends in the Bloomberg ‘Yield-to-Worst (YTW)’ index for US investment grade, high yield (or junk) bonds and US Corporate long bonds show trends similar to 2010 levels. This duration of this “new” credit regime is likely to last for some time at least till 2023 when the Fed rate is expected to peak.
The report added that the current build-up of risk in the US credit markets has been a long-drawn structural change which has been tracked since 2018.
Meanwhile, US housing markets show that the four major territories where home sales data are collated show varying trends with home sales not picking in important geographies.
Existing (previously owned) home sales in the US edged 0.4 per cent lower (seasonally adjusted) to 4.8 million in August 2022, the lowest figure since May 2020, continuing the course from a downwardly revised 5.7 per cent fall in July.
Growth estimates for India have already been downwardly revised. With the entire world facing the spectre of unprecedented recession in 2023, India still stands like an oasis in an era of uncertainty.
“However, we must temper down our growth expectations in FY23 and FY24 from current estimates. A 6 per cent or even below could well become the new normal. Even then India will still remain the fastest economy in the world by a large margin,” it mentioned.