Industry chamber Ficci and the Asian Development Bank have both lowered their growth forecasts for the current fiscal, while estimating inflation above the RBI’s comfort level. The Federation of Indian Chambers of Commerce and Industry said growth would be lower at 7 per cent in 2022-23 against its earlier estimate of 7.4 per cent.

The ADB trimmed India’s economic growth forecast for the current fiscal year to 7.2 per cent from 7.5 per cent. “India has been hit by the omicron Covid-19 variant and the economic impact of the war in Ukraine,” ADB said.

On the inflationary outlook for the next fiscal, ADB said it had been revised upwards to 6.7 per cent from 5.8 per cent on higher-than-expected oil prices. Ficci has pegged the median forecast for CPI-based retail inflation rate at 6.7 per cent for 2022-23, with a minimum and maximum range of 5.4 per cent and 7 per cent, respectively. The Reserve Bank’s upper tolerance limit for inflation is 6 per cent.

Ficci’s Economic Outlook Survey (July 2022) also said the policy rate of the Reserve Bank of India is expected to reach 5.65 per cent by the end of this fiscal. Currently, the policy rate (repo) is 4.9 per cent. The present round of Ficci survey was conducted in June that covered leading economists representing industry, banking and financial services sector. The survey has projected an annual median GDP growth for 2022-23 at 7 per cent, with a minimum and maximum growth estimate of 6.5 per cent and 7.3 per cent, respectively. “Growth forecast has been downgraded from the 7.4 per cent estimate in previous survey round (April 2022) owing to geopolitical uncertainty and its repercussions 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 industry and services sectors are anticipated to grow 6.2 per cent and 7.8 per cent, respectively. According to the Ficci survey, major risks to India’s economic recovery include rising commodity prices and supply-side disruptions.