NEW DELHI – There are risks to India achieving its real growth forecast of 6.5 percent for the financial year that started April 1, partly due to a rise in oil prices and troubles in the global financial markets, the government said on Tuesday.
Earlier this month, the International Monetary Fund (IMF) predicted the Indian economy would grow 5.9 percent in the 2023-24 financial year, down 0.2 percent from its January estimate, as it warned that turmoil in the financial system will hurt global growth.
“We reiterate that downside risks to our official forecast of 6.5 percent for real GDP growth in FY24 dominate upside risks,” India’s finance ministry said in a monthly economic review.
Factors such as potential risks from El Nino conditions could also lower agricultural output and impact prices, apart from geopolitical conditions, affecting growth and anticipated inflation, the review said.
However, the country is projected to be the world’s fastest growing economy in 2023/24 on the back of robust macroeconomic conditions. These include easing inflation, improved current account deficit and a strong banking system. – Reuters
