India at risk of losing the status as the fastest growing economy: reporttext_fields
Bengaluru: Economists predict that Indian economy will slow its pace of growth further towards end of the year.
Despite recording likely double-digit growth last quarter, India's growth rate could pace more than halve this quarter, according to report by Reuters.
Growth this quarter could slow sharply to an annual 6.2 per cent from a median forecast of 15.2 per cent in Q2.
Encomiasts are reported as saying that the solid growth rate, expected to be at 7.2 per cent for 2022, masks how rapidly the economy is expected to slow in the coming months.
India's high employment and inflation, according to the response of economists by polled Reuters, have been running above RBI's tolerance band all year.
Economist Kunal Kundu is quoted as saying that domestic consumption will not drive growth further as unemployment remains high and real wages are at a record low level.
The big picture is even more disturbing considering the fact that the economy has not grown fast enough to accommodate some 12 million people joining the labour force each year.
In its efforts to bring down inflation to a tolerance limit, the RBI might raise its repo rate by another 60 basis points by the end of March.
A week rupee is another glitch as it is trading close to 80 to the US dollar for months now, which, according to the report, the central bank has been defending in currency markets by selling dollar reserves.