India's economy could see a significant slowdown this fiscal year as the global economic slump hinders domestic development prospects. This as per a Reuters polls of 45 economists. The poll also revealed that inflation will stay high despite recent interest rate hikes.
Although quicker than most major countries, the anticipated expansion will still be below the long-term average.
The poll also found that growth in the third-largest economy in Asia was projected to fall to 6% in the fiscal year to end–March 2024, remaining unchanged from a March survey, after likely rising 6.9% in the previous fiscal year.
For this fiscal year, the Reserve Bank of India predicted a 6.5% growth rate. From the previous month, the poll's forecasting range had widened.
In the most recent survey, all respondents projected that economic growth would slow noticeably this fiscal year, with the most optimistic forecasting 6.6% and the weakest 4.4%.
The RBI's rate increases since May of last year are also probably going to have an effect on this year's GDP. After raising interest rates by 250 basis points, the central bank is now anticipated to continue its prolonged pause at least through the end of the year.
This is true even if inflation is still much above the RBI's medium-term objective of 4.0%.
According to the poll's median, inflation will be 5.3% this fiscal year, just over the central bank's forecast of 5.2%, and 5.0% the next year.
18 of the 19 respondents who responded to the follow-up question almost unanimously agreed that the danger to their prediction of inflation this year was that it would be higher than they currently anticipated, as reported by Reuters.