FinMin economic review cautions against low agri-output & elevated global prices

New Delhi, Apr 25 (KNN) In the March edition of the Finance Ministry’s Monthly Economic Review, it is noted that India needs to be vigilant against potential risks of lower agriculture output, elevated prices and geopolitical developments.

There are factors which could affect the favourable combination of growth and inflation outcomes currently estimated despite the 6.5 per cent growth projection for the current fiscal is in line with the estimates of the World Bank and the Asian Development Bank (ADB).

“It is important… to be vigilant against potential risks such as El Nino conditions creating drought conditions and lowering agricultural output and elevating prices, geopolitical developments and global financial stability,” the review said.

All these three could affect the favourable combination of growth and inflation outcomes currently anticipated, it said.

India’s economy has been strong in FY23 in spite of the tailwind of the pandemic and the headwind of the geopolitical conflict intertwining to escalate global economic uncertainty, the report said.

“The strength is seen in the economy, estimated to grow at 7 per cent, higher than the trend rate and the growth of the other major economies. Growing macroeconomic stability as seen in the improved current account deficit, easing inflation pressure, and a banking system strong enough to survive the increase in policy rates, has made the growth rate further sustainable,” it said.

Access report here: https://www.dea.gov.in/sites/default/files/Monthly%20Economic%20Review_March%202023_0.pdf.   (KNN Bureau)