Although downside risks from geopolitical worries, a strengthening currency, and high inflation will persist, the Indian economy is poised for further improvement in the next quarters after recovering from the COVID-induced dip in 2022. The positive trajectory in the growth trend and enhanced fundamentals will help the nation in neutralising the impact of global headwinds which are expected to have a bearing on the country's exports in the months to come.
To maintain India as one of the world's fastest-growing major economies, the government and Reserve Bank must control inflation, stop the rupee's value from falling against the US dollar, and encourage private investment and growth.
In the first half of 2022–23 (April–September), India experienced growth of 9.7%, compared to 5.6% in Indonesia, 3.4% in the UK, 3.3% in Mexico, 3.2% in the Euro area, 2.5% in France, 2.2% in China, 1.8% in the USA, and 1.7% in Japan.
"From the perspective of India, the worst of the headwinds coming from abroad is probably behind us... Overall, I continue to anticipate that we will finish the current fiscal year with a growth rate higher than 7%.
Assuming there are no unpleasant shocks in the upcoming budget, the 7% growth rate should continue next year, according to economist and former vice-chairman of the Niti Aayog Arvind Panagariya.
Consistently high inflation that lasted over the Reserve Bank's comfort zone for the majority of the year was the economy's largest challenge. In fact, the national government requested a report from the RBI explaining why it failed to control inflation.
Policymakers continued to face difficulties due to the rupee's declining value versus the US dollar, which increased the cost of imports and had an impact on the current account deficit of the nation. Analysts predict that the rupee would experience more pressure in the upcoming months.
Due to the recession in important western markets and the geopolitical turmoil brought on by the Russia-Ukraine war, exports also experienced global headwinds in 2018, and things may not get any better in 2023.
The technology sector had significant job cuts in the latter half of 2022 due to the unstable global economy, but the New Year is set to bring a variety of chances for job seekers as the telecom and services-oriented industries are predicted to increase recruiting.
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