Year in Review | Indian economy amid economic headwinds

Year in Review is an attempt to show the events that marked the year 2022. Here’s a recap of India’s economic indicators.

Multiple headwinds at varied points of time impacted the Indian economy’s thorough economic revival in the calendar year 2022. The year started with the threat emanating from the Omicron variant which settled towards the later end of the succeeding month. This was followed by the Russian actions in Ukraine and the ensuing disturbances in global supply chains and inflation. With advanced economies tightening their monetary policy stance, it affixed ripple effect in global markets and to the economies of emerging and low-income countries.

The Indian economy too was not aloof to the headwinds with the central regulator, the Reserve Bank of India (RBI), constantly alternating between focus on growth after easing of the Omicron-induced wave and combatting inflation by tightening their monetary policy stance.

Here are how the broader economic indicators panned out in 2022 and the currents that shaped them:

In the first half of the ongoing financial year, the Indian economy registered a GDP growth of 9.7% compared to 13.7% on a year-over-year comparison. Gross Value Added (GVA) rose 9% compared to 12.8% during the same period last year. GDP in the June-end quarter, though lower than the RBI’s projection, rose 13.5% aided by an uptick in private consumption spending and gross fixed capital formation with a moderation in government final expenditure.

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In the September-end quarter with the normalisation of the base effect, GDP growth slowed to 6.3%. The mining and manufacturing sectors experienced contraction, combined with high inflation, weak exports and increased input prices in certain sectors led GVA rising slower-than-expected at 5.6%. “India’s growth rates in real terms of 9.7% in the first half of this year is well above the trend in other countries and is happening amid tightening global financial conditions and the commodity price shock since the Ukraine invasion by Russia,” CEA V. Anantha Nageswaran had emphasised.

Also read | Global slowdown not mirrored in India, says Finance Ministry