The biggest risk to the Indian economy affected by the late recovery epidemic: the referendum

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The biggest risk to the Indian economy affected by the late recovery epidemic: the referendum

GDP growth is projected to average 9.2% this fiscal year.

Economists in a Reuters poll say India’s economic recovery from epidemic strikes is likely to be further delayed for the remaining six months of this fiscal year, with inflation expected to rise or rise.

Inflationary pressures in the world’s second most populous country have been exacerbated by rising fuel prices, but the Reserve Bank of India is not expected to raise interest rates, at least early next fiscal, in April-June 2022.

With lingering concerns about the risks to growth, this is already pushing the Reserve Bank slightly behind many emerging market peers who are raising rates.

“Even if the most accommodating monetary policy prevents the economy from falling off a cliff, the continuity of this policy in the absence of adequate financial support will not move the needle at the pace of recovering lost growth potential,” Kunal said. Society General.

In the September 27-October 4 poll, economic growth in Asia’s third-largest economy was projected at 7.8%, 6.0% and 5.8% for Q8, Q4 and Q1 2022, respectively. The July referendum provided more forecasts for Q3 and Q1 2022.

This is the highest since the mid-1990s, following a 20.1 percent expansion in the April-June quarter, helped by a very low base — the onset of the epidemic in the previous year.

Gross domestic product (GDP) growth is projected to average 9.2 percent this fiscal. In the next financial year, growth is expected to be 9.7 per cent and 7.1 per cent in the first two quarters and 6.5 per cent and 6.4 per cent in the last two quarters, averaging 7.0 per cent in 2022/23.

Those predictions have not been greatly shaken since the July referendum.

For the rest of the fiscal year, 23 out of 34 or more than two-thirds of respondents asked if there was a high risk that recovery would be delayed with limited negativity. Eight said a strong recovery following an upgrade, and the remaining three are likely to be weaker and further downgraded.

“But inflation is expected to rise … Continuing with an over-accommodating monetary policy while the economy is in a recovery phase will lead to stagnation, which will affect recovery,” the bomb said.

Inflation is projected to be above the Reserve Bank’s medium-term target of 4 per cent, but at least by the end of 2024 it is projected to be below the upper limit of 6 per cent.

The RBI has been instrumental in helping the government boost growth.

“It is still a long time before financial conditions start to tighten drastically, and before policy rates are raised. The rate hike will be on the agenda to keep the economy close to health,” said Shilon Shaw of the Capital Economy.

“The bigger the picture, the more comfortable the policy will be for many more months.”

Despite those uncertainties about the pace of recovery, the Indian stock market was not shocked as stock prices repeatedly hit record highs.

Investors turned to Indian stocks in April-May faster than expected as businesses and movements recovered from the catastrophic second wave of Govt-19.

Unemployment has also improved as major restrictions have been lifted. A further 17 of the 27 respondents said unemployment, which is the lowest or lowest risk, will increase in the coming year. The rest said there was more risk.

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