New Delhi [India], February 28 : The near-term global economic outlook is influenced by trade policies of major economies amid a slowing disinflation, said Chief Economic Adviser Anantha Nageswaran said on Friday, soon after the GDP figures for October-December were released.
In apparent reference to tariff imposition by the US against a few countries and countermeasures from those countries who are affected, Nageswaran, at a virtual presser, said these policies may fuel inflation, lead to tighter financial conditions, and increase market volatility.
Further, the chief economic adviser said developments such as the US Dollar's strength and rising Japanese interest rates could exacerbate capital outflows from emerging markets, raise risk premiums, and heighten external risks.
But, despite the uncertain global outlook, India's economic momentum is expected to sustain, driven by strong rural demand and a revival in urban consumption, he said in his presentation before the reporters.
"Robust kharif production and better rabi sowing, coupled with higher reservoir levels and seasonal winter correction in vegetable prices, augur well for food inflation going forward."
The Union Budget, emphasis on agriculture, MSMEs, investment, and exports is likely to enhance India's medium-term economic prospects, he added in his presentation.
The Indian economy grew by 6.2 per cent in real terms in the October-December quarter of the current financial year 2024-25, Ministry of Statistics and Programme Implementation's official data showed on Friday.
The October-December growth is higher than the July-September quarter. In July-September, the GDP grew by 5.6 per cent.
The October-December quarterly growth was, however, lower than RBI's forecast of 6.8 per cent. The GDP numbers in April-June and July-September too grew at a slower pace than was estimated by the central bank.
The weak GDP numbers can be gauged from the consumption in the economy and the latest stock market performance.
The RBI has projected real GDP growth for 2024-25 at 6.6 per cent.
In the January-March quarter, the GDP is expected to grow 7.2 per cent, as RBI projected in December's monetary policy.
According to the Ministry of Statistics and Programme Implementation's estimates released today, the Indian economy, in real terms, is expected to grow by 6.5 per cent in 2024-25 as compared to the 8.2 per cent growth in 2023-24. It is 10 basis points less than RBI estimates.
Nominal GDP is expected to witness a growth rate of 9.9 per cent in 2024-25.
In 2025-26, the Indian economy is projected to grow between 6.3 per cent and 6.8 per cent, as noted in the Economic Survey presented on January 31.
India's GDP grew by an impressive 8.2 per cent during the financial year 2023-24 and continued to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.
This afternoon, the World Bank said India will need to grow by 7.8 per cent on average over the next 22 years to achieve the country's aspirations of becoming a developed country by 2047.
Getting there, however, would require reforms and their implementation to be as ambitious as the target itself, the World Bank said in a statement today.
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