Unlike global economy, India would not slow down: RBI article

Unlike the global economy, India would not slow down and maintain the pace of expansion achieved in 2022-23, an RBI report said on Tuesday.

"We remain optimistic about India, whatever the odds," said the article on the state of the economy published in the March edition of the Reserve Bank bulletin.

The NSO’s end-February data release indicates that the Indian economy is intrinsically better positioned than many parts of the world to head into a challenging year ahead, mainly because of its demonstrated resilience and its reliance on domestic drivers, it said.

Even as global growth is set to slow down or even enter a recession in 2023 as global financial markets wager, India has emerged from the pandemic years stronger than initially thought, with a steady gathering of momentum since the second quarter of the current financial year, it said.

"Year-on-year growth rates do not reflect this pick-up of pace because by construction they are saddled with statistical base effects, and instead suggest a sequential slowing down through successive quarters of 2022-23 to an unsuspecting reader," said the article.

The article has been authored by a team led by RBI Deputy Governor Michael Debabrata Patra.

The authors further said India’s real GDP can go up from Rs 159.7 lakh crore in 2022-23 to Rs 170.9 lakh crore against the current projection of Rs 169.7 lakh crore in 2023-24.

"This is simple arithmetic; hardly a hurray at half-time. Also, unlike the global economy, India would not slow down – it would maintain the pace of expansion achieved in 2022-23. We remain optimistic about India, whatever the odds," the article said.

Currently available forecasts of India’s real GDP growth for 2023-24, including those of the RBI, settle between 6 and 6.5 per cent.

The central bank said that views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India.