India’s economic outlook

We are halfway through 2023, and the probability of a recession in major industrial countries this year has decreased. In fact, several economic indicators such as the tight labour markets and reduced risk spreads following the US banking crisis suggest that downside risks to global growth are subsiding.
 
Amidst continuing global uncertainties, India is presently enjoying a “Goldilocks” moment. Urban demand has remained resilient while rural demand is showing signs of recovery. While investment is gaining traction, inflation remains a concern. Further, uncertainties surrounding the actions of the central banks of major economies and the oil price movements could pose significant risks.
 
Deloitte maintains an optimistic outlook and has released its expectation for this year and the next. Our growth forecasts for FY2023-24 remain similar to our April forecast, except for the raised base for comparison due to higher than-expected growth in FY2022-23. That said, considering the buoyancy in the economy, we have raised our lower limit of the range. In fact, if global uncertainties recede, we expect growth to surpass 7 percent over the next two years.