India Economic Forecast

India Economic Outlook

January 25, 2022

After economic growth moderated in Q3 (FY Q2 2021), mainly due to a fading base effect, activity should have eased further year-on-year in Q4, but will have likely strengthened in sequential terms. In October–December, the composite goods PMI averaged notably higher than in the previous quarter, while the PHDCCI economy GPS index—a leading indicator of GDP—hit a fresh record high in December, pointing to healthier demand dynamics relative to Q3. Shifting focus to this calendar year, new Covid-19 cases have surged in recent weeks, leading authorities to tighten some restrictions to contain the spread, but this should have a relatively limited impact on the economic recovery. Meanwhile, the government is expected to unveil its fiscal year 2022–2023 Union Budget on 1 February, which should see slightly stronger spending more than offset by higher revenues, leading to a narrowing of the fiscal deficit.

India Economic Growth

Following an expected strong expansion in FY 2021 (April 2021–March 2022), GDP growth is seen losing some momentum in FY 2022 as the low base effect fades. That said, healthy household spending should keep the economy growing at a brisk pace. Uncertainty over the emergence of the Omicron variant, supply chain difficulties and twin deficits pose risks. FocusEconomics panelists project GDP to expand 8.0% in FY 2022, which is up 0.3 percentage points from the previous month’s forecast. In FY 2023, our panel expects growth of 6.4%.

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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