1- India's GDP growth is expected to be 7% in 2023, following an 8.7% growth in the previous financial year.2- The Economic Survey 2023 predicts a baseline GDP growth of 6.5% in real terms and 11% in nominal terms for 2024
Inflation Under Control but Interest Rates to Rise
The retail inflation is back within the RBI's target range, thanks to the government's multi-pronged approach
However, borrowing costs may remain "higher for longer" as inflation may prolong the tightening cycle
Employment Generation on the Rise
1- Higher employment generation has been observed, with the urban unemployment rate declining.2- Labor markets have recovered beyond pre-Covid levels in both urban and rural areas. 3- Registrations in the EPF scheme has increased
Agricultural Sector Seeing Boost
1- Private investment in agriculture has increased to 9.3% in 2020-21
2- Institutional credit to the agricultural sector continues to grow, reaching 18.6 lakh crore in 2021-22
3- The sector is poised for further growth with increased investment and credit
MSME Sector Seeing Growth
1- Credit to Micro, Small and Medium Enterprises (MSMEs) has grown by an average of 30% since January 2022
2-Credit to large industry has also been showing double-digit growth since October 2022
3- This bodes well for the MSME sector and the economy as a whole
FDI in Manufacturing Sector Moderates
1- Foreign Direct Investment (FDI) in the manufacturing sector moderated in H1 20232- However, inflows remained well above pre-pandemic levels, driven by structural reforms and ease of doing business measures
3- India is one of the most attractive FDI destinations in the world
External Sector Performance
1- The growth of exports moderated in H2 2023, but their surge in 2022 and H1 2023 shifted production processes into cruise mode
2- India's exports will continue to play a key role in the economy's growth
Pharma and Mobile Exports on the Rise
1- The Indian Pharmaceuticals industry is a prominent player in the global pharmaceuticals industry.
2- FDI in the pharma sector crossed the $20 billion mark by September 2022
3- India has become the second-largest mobile phone manufacturer globally.
Credit Growth Remarkably High
1- Credit growth to the MSME sector has been remarkably high, averaging over 30.5% during Jan-Nov 2022
2- Capital expenditure of the central government, up 63.4% in the first eight months of 2023, is another growth driver of the Indian economy
Current Account Deficit May Widen
1- CAD may continue to widen as global commodity prices remain elevated and economic growth stays strong.
2- The rupee may come under pressure if CAD widens, but India's economy is still a bright spot amid recessionary fears in advanced economies.