India Economic Forecast

India Economic Outlook

June 21, 2022

The economy recovered above its pre-pandemic level in FY 2021, which ended in March this year. Turning to the first quarter of FY 2022, GDP growth is likely to speed up considerably. Growth in the industrial sector accelerated in April, suggesting it weathered the disruption to power supply caused by record-breaking temperatures well. Moreover, looser Covid-19 restrictions are boosting domestic demand, helping to push the services PMI to an over 11-year high in May. Demand will also be supported by new measures to combat rising inflation, including cuts to fuel duty, a doubling of the fertilizer subsidy, an export ban on wheat and cuts to import tariffs for some raw materials. That said, inflation remained at a near-decade high in May, which together with higher interest rates will be capping momentum.

India Economic Growth

Growth this year is set to slow, but it will still be higher than it was before the pandemic. Consumption will be boosted by the relaxation of Covid-19 restrictions, while increased government spending will add impetus. That said, rising commodity prices pose a downside risk. The Consensus projects GDP to expand 7.4% in FY 2022, which is down 0.1 percentage points from the previous month’s forecast, and 6.3% in FY 2023.

India Economy Data

2015 2016 2017 2018 2019
Population (million)1,2831,3001,3171,3341,352
GDP per capita (USD)1,6331,7662,0182,0232,113
GDP (USD bn)2,0962,2952,6572,6992,857
Economic Growth (GDP, annual variation in %)8.08.37.06.1-  
Consumption (annual variation in %)7.98.17.07.2-  
Investment (annual variation in %)6.58.57.29.8-  
Industrial Production (annual variation in %)3.34.64.43.8-1.2
Public Debt (% of GDP)68.868.769.469.471.9
Money (annual variation in %)11.56.721.814.310.3
Inflation Rate (CPI, annual variation in %, eop)4.83.94.32.95.9
Inflation Rate (CPI, annual variation in %)4.94.53.63.44.8
Inflation (PPI, annual variation in %)-3.61.82.94.31.7
Policy Interest Rate (%)6.756.256.006.254.40
Stock Market (annual variation in %)-9.416.911.317.3-23.8
Exchange Rate (vs USD)66.2564.8665.1169.1975.34
Exchange Rate (vs USD, aop)65.4267.0464.4669.9170.91
Current Account (% of GDP)-1.1-0.7-1.8-2.1-  
Current Account Balance (USD bn)-22.1-15.2-48.7-57.0-  
Trade Balance (USD billion)-117.3-108.9-158.6-182.3-153.5
Exports (USD billion)262275305331314
Imports (USD billion)379384463513467
Exports (annual variation in %)-15.65.110.68.5-5.1
Imports (annual variation in %)-15.31.320.510.7-8.9
International Reserves (USD)356373421414476
External Debt (% of GDP)23.120.519.920.1-  

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India Facts

Value Change Date
Bond Yield6.50-0.04 %Jan 01
Exchange Rate71.23-0.09 %Jan 01

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