Industry body FICCI said India's economy is projected to grow 7 per cent in the current fiscal, but it is less than the earlier projection of 7.4 per cent.
The policy rate of the Reserve Bank of India is expected to reach 5.65 per cent by the end of the fiscal, according to the Economic Outlook Survey July 2022 by FICCI.
The policy rate repo is 4.9 per cent.
The survey conducted in June covered leading economists from the banking, banking and financial services sector.
The survey projected an annual median GDP growth of 7 per cent for 2022 -- 23 and a minimum and maximum growth estimate of 6.5 per cent and 7.3 per cent, respectively.
The growth forecast has been downgraded from the 7.4 per cent estimate in the previous survey round April 2022 due to geopolitical uncertainty and its implications for the Indian economy, FICCI said.
The median growth forecast for agriculture and allied activities has been pegged at 3 per cent for 2022 -- 23 while the industry and services sectors are expected to grow 6.2 per cent and 7.8 per cent, respectively.
The Indian economy is not immune to global volatility, as evidenced by the deepening inflationary pressures and increasing uncertainty in financial markets. The participants pointed out that these factors are exerting pressure on India's economic prospects and are likely to delay the recovery.
The survey found that there are major risks to India's economic recovery including rising commodity prices, supply-side disruptions, and a bleak global growth prospects with the conflict in Europe.
Economists said the global economy's prognosis will be determined by inflation trajectory, the extent of interest rate hikes required to maintain price stability, and the impact of higher rates on household consumption and investment demand in the year 2023.
With downside risks to growth building up, and significant uncertainty regarding the US Federal Reserve's ability to anchor inflation levels, the possibility of a recession in the medium-term cannot be overruled.
The central bank is expected to keep its hawkish stance throughout the calendar year 2022, according to the economists.
The survey said that the policy repo rate is projected to be at 5.65 per cent by the end of the fiscal year 2022 -- 23 with a minimum and maximum range of 5.50 per cent and 6.25 per cent respectively.
The survey found that the median retail inflation rate for CPI-based retail inflation is 6.7 per cent for 2022 -- 23 with a minimum and maximum range of 5.4 per cent and 7 per cent.
This is in line with the RBI's direction in June 2022's monetary policy announcement, FICCI said.
The government should develop a comprehensive roadmap that includes upside risks and inflation, which may require action at multiple levels, as per the survey.