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The American publicly traded corporation, S&P Global has predicted that India will have the fastest growing GDP in FY23 in Asia-Pacific.
According to its report, S&P global has forecasted India's GDP growth at 7.8% for FY23. Compared to that, it has forecasted the GDP growth of Asia-Pacific nations to 5.1% for 2022, and to about 4.5% in the years to come.
The report has been produced by analyzing the economic impact of the Covid-19 induced pandemic, and the ongoing Russia-Ukraine crisis.
The worst impact of both these situations has been inflation.
“Given our current oil price forecast, average consumer inflation is likely to stay firm at 5.4 percent in fiscal 2023,” it said, referring to India.
The report predicts that the rising inflation in India should compel the central bank to signal a neutral stance in its April review meeting, followed by a normalization of the policy-rate corridor (the gap between the repo and reverse repo rate) and eventually increase the reverse repo rate in the upcoming monetary policy.
“The central bank will likely raise the repo rate by at least 50-75 basis points through the fiscal year 2023, and by another 50 basis points in fiscal 2024,” the S&P analysts wrote in the report. The policy rate in India may be revised to 5.25 percent soon.
It is to be noted that due to the high prices of energy and other commodities, Consumer inflation is already at a high and has already exceeded the RBI's targets.
Although the damage to the economy due to the pandemic and the global war tensions are huge, the Asian countries are still recovering.
The central bank's future policies will play a big role in elevating the economic conditions of the country and providing it a greater boost.
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