Indian economy is expected to grow by 7.8% in 2022-23, mainly led by the government’s drive to push infrastructure spending and likely increase in private capital expenditure, rating agency Crisil said.
The rating agency, however, cautioned that the ongoing Russia-Ukraine war and rising commodity prices do pose a downside risk to the growth.
The nation is expected to register a growth rate of 8.9% in the current fiscal ending March 31.
“Any potential upside due to the early end of a mild third wave of coronavirus outbreak will be offset by the ongoing war, which is creating a dampening effect on global growth and pushing oil and commodity prices. The risks to growth are also tilted to the downside”, it said.
Private consumption remains the weak link, owing to reduced direct fiscal policy support, Crisil Chief Economist Dharmakirti Joshi said while unveiling India outlook Fiscal 2023.
As for the average consumer price index-based inflation, he said, it will stay firm at 5.4% next fiscal if the price of crude oil averages $85-90/barrel and takes into account the excise duty cuts announced last year.
However, upside risks will build if the geopolitical strife prolongs, keeping oil and commodity prices higher for longer.