Amid recession worries in some of the global economies, brokerage Nomura has slashed India’s growth projection for 2023 to 4.7 per cent from 5.4 per cent. “India’s economy is racing above its pre-pandemic level, led by a recovery in the services sector and supported by the lagged effects of easy financial conditions and a public capex push. The improvement has been broad-based across consumption, investment, industry and external sectors.”

“However, exports have started to struggle and elevated imports are pushing up monthly trade deficits to record highs,’’ a note by Sonal Varma and Aurodeep Nandi said.

The economists added that there are rising medium-term growth headwinds from higher inflation, monetary policy tightening, dormant private capex growth and most importantly, the global growth slowdown. Therefore, they expect a lower growth rate in 2023.

For the current fiscal year, they estimate the real GDP growth to come at 7 per cent while it is expected at 5.5 per cent for 2023-24. The forecast indicates that the domestic economy could be confronted by a slowdown in the months ahead as the RBI raises the policy repo rate to check inflation and as some of the global economies face recession. A Deloitte India report feels otherwise. The report said that rising commodity prices, surging inflation, supply shortages and shifting geopolitical realities across the world weigh on the growth outlook.

“Still, India will likely reign as the world’s fastest-growing economy. India is expected to grow by 7.1–7.6 per cent in 2022–23 and 6–6.7 per cent in 2023–24. This will ensure that India grows the fastest over the next few years.”