India will remain fastest-growing major economy in FY'24: Finance Ministry report
The Hindu
India to remain fastest-growing major economy in FY24; domestic macro fundamentals strong, global headwinds and weather uncertainties pose downside risks. India's outlook bolstered by strong domestic fundamentals, investment demand, industrial growth, reservoir levels and forex reserves.
India will remain the fastest-growing major economy in the world in 2023-24 fiscal on the back of strong domestic fundamentals and benign inflation expectations, a Finance Ministry report said on October 23.
The September edition of the Monthly Economic Review also flagged that global uncertainties have been compounded by recent developments in the Persian Gulf and depending on how the situation develops, crude oil prices may push higher.
Further, the relentless supply of U.S. Treasuries and continued restrictive monetary policy in the U.S. (with further monetary policy tightening not ruled out) could cause financial conditions to be restrictive.
At current levels, U.S. stock markets have greater downside risk than upside. If the downside risk materialises, it will have spill over effects on other markets, the report said.
"Fraught geopolitical conditions can cause a general increase in global risk aversion. If these risks worsen and are sustained, they can affect economic activity in other countries, including India," the Ministry said.
However, the report emphasised that India's macroeconomic outlook for fiscal 2023-24 is bright and is solidly underpinned by strong domestic fundamentals. Alongside private consumption, investment demand is also firming up.
There are additional growth levers in broad-based industrial growth and buoyant residential property markets. Industrial capacity utilisation has improved.