India's GDP growth expected to hover around 7 percent this year

NEW DELHI, Dec. 6 (Xinhua) -- A week ago the Indian government's data showed growth of the country's gross domestic product (GDP) fell to 6.3 percent in the second quarter (July-September) of the current fiscal year, from 8.4 percent recorded a year earlier.

In the previous quarter (April-June), India's GDP had grown by a whopping 13.5 percent.

"Real GDP in the second quarter of 2022-23 is estimated at 38.17 trillion Indian rupees (around 463 billion U.S. dollars), as against 35.89 trillion Indian rupees (around 436 billion dollars) in the second quarter of 2021-22, showing a growth of 6.3 percent," showed the government's data.

Among the key sectors, agricultural output rose by 4.6 percent, the construction sector saw a 6.6 percent jump, while the manufacturing sector recorded a fall of 4.3 percent.

Indicators show the economy is set to slow further as the South Asian country's central bank, the Reserve Bank of India (RBI), has been raising interest rates to check inflation running above its target range of 2-6 percent.

The GDP growth rate of 6.3 percent is seen in line with the RBI's forecast. In November, it had pegged the growth at 6.1-6.3 percent for the second quarter of this fiscal year.

On Tuesday, the World Bank revised up India's GDP growth forecast to 6.9 percent for fiscal 2022-23. In October, it cut India's GDP growth forecast to 6.5 percent from 7.5 percent projected earlier.

Business newspaper The Economic Times quoted senior economist at World Bank Dhruv Sharma as saying that India's economy had rebounded "fairly robustly" following the contraction that occurred during the pandemic year, which was "driven largely by robust domestic demand."

The Asian Development Bank (ADB) has cut India's growth projection to 7 percent, from its earlier projection of 7.5 percent.

S&P Global Ratings has revised down its forecast to 7.3 percent for the current fiscal year from 8.7 percent.

Meanwhile, economic experts describe India's GDP growth as satisfactory and hope for a better show in the coming months.

The federal government's Chief Economic Adviser V. Anantha Nageswaran said last month that private consumption growth has rebounded. "There are positive signs of private investment picking up," he told reporters while announcing the GDP figures at the end of November.

He added that the current inflation rate was well below the peak in April.

"Wholesale inflation in India moderated significantly in July amid easing commodity prices," Nageswaran said.

In the second week of November, international rating agency Moody's cut its projections of India's growth for the current calendar year to 7 percent from 7.7 percent, and to 4.8 percent in 2023 before recovering to around 6.4 percent in 2024.

The credit rating agency cited higher inflation, high interest rates and slowing global growth as the major reasons dampening the economic momentum more than it had expected.

In its latest Outlook for Growth, India's central bank expects to see a 7 percent growth for this fiscal year.

"Taking into account the baseline assumptions, survey indicators and model forecasts, real GDP growth is expected at 7 percent in 2022-23, 6.3 percent in the second quarter and 4.6 percent each in the third and fourth quarters," said the RBI.