The country's gross domestic product GDP is expected to grow 7.4 per cent in the current financial year 2022 -- 23 according to the FICCI Economic Outlook SurveyFICCI Economic Outlook Survey released on Sunday. The survey estimates that there is a minimum and maximum growth of 6.0 per cent and 7.8 per cent, with rising prices triggered by the Russia-Ukraine conflict posing as the biggest challenge to the global economic recovery.
It also forecasts the median growth for agriculture and related activities about at 3.3 per cent for 2022 -- 23. Industry and services sectors are expected to grow by 5.9 per cent and 8.5 per cent, respectively.
The Reserve Bank of India RBI is expected to initiate a rate hike cycle in the second half of 2022, while a repo rate hike of 50-75 bps is expected by the end of the current fiscal year.
The RBI will continue to support the economic recovery by keeping the repo rate unchanged in its April policy review, the survey said.
The downside risks to growth are escalated, according to the survey. The Russia-Ukraine conflict poses a significant challenge to global recovery, as the threat from the COVID-19 epidemic is still looming, according to the survey.
It said that rising international commodity prices are the biggest risk as Russia and Ukraine are global suppliers of key commodities. It said that if the conflict continues for a long time, it will affect supplies of major raw materials, including crude oil, natural gas, food, fertilizers, and metals.
Inflation predicted by the FICCI in Q 4/2021-22 and 5.5 per cent in Q 1 - 23 was predicted by the Economic Survey of the FICCI. It said that the median forecast of 5.3 percent for 2022 -- 23 for CPI-based inflation could fluctuate between 5.0 percent and 5.7 percent.
The survey expects to see some respite in CPI-based inflation in the coming fiscal year, which has been above the target range of the RBI in January-February 2022.
India is a net importer to meet its energy requirements, and the rise in crude prices is a major shock to India's macroeconomic framework. If the conflict continues, the impact on the economy is expected to be more serious, according to the survey.
In March of this year, the Economic Outlook Survey conducted by Ficci to gauge the response of economists from sectors like industry, banking and financial services. The economists were asked for their forecasts on key macroeconomic variables for 2022 -- 23, Q 4 January -- March of FY 22 and Q 1 April-June of FY 23.