India’s economic recovery remains unrushed due to the recent pandemic and Russian invasion.
As previously predicted, India’s economic recovery is growing slower due to last year’s Covid cases and rising commodity prices.
India’s economic recovery delayed
According to the median estimate in a Bloomberg survey, GDP probably expanded 9.1% in the year to March 31.
The expansion was the quickest to gain pace among major economies.
However, as the last survey and official statistics ministry estimates, the expansion was slower than 9.2% last month.
Furthermore, fiscal and monetary policies have remained loose despite the rising inflation pressures.
Moreover, these policies are tested due to the slow pace of expansion, hurting job creation and investment.
The geopolitical crisis affecting India’s economic recovery and oil prices
Last week, Prime Minister Narendra Modi’s government warned that recovery from the pandemic would be challenging amid a rising geopolitical crisis.
An economist with ICICI Bank Ltd, Sameer Narang, said Asia’s third-largest economy is facing a “drag in manufacturing output and impact of omicron variant in contact-intensive sectors, geopolitics remains a risk.”
India’s private consumption accounts for some 60% of GDP. Furthermore, the outlook on inflation and impact disposable incomes worsens due to high oil prices.
Last week Bloomberg tracked 11 Asian currencies, among which the rupee was the second-worst performer.
What is the future of the India’s economic recovery?
On Friday, Finance Minister Nirmala Sitharaman said, “When value chains are facing challenges and threats because of these disturbances, our recovery, not just for India, but countries everywhere will be severely hampered.”
“Hopefully, some kind of restoration of peace at the earliest will happen based on which recoveries can be sustainable.”
On Monday, the expected quarterly GDP data will show growth slowing to 5.9% in the last three months of 2021.
However, the expansion was estimated to be 8.4% in the preceding quarter.
Amid the Russia-Ukraine crisis, the Indian and global economy is suffering. Rising oil and commodity prices are worsening the inflation outlook.