Delhi, India: The Indian economy is expected to grow at 7% in FY23 despite global headwinds, and retail inflation is expected to moderate in line with wholesale inflation, which fell to a 25-month low in January, according to the finance ministry.
According to the ministry's "Monthly Economic Review," India's current account deficit is expected to fall in FY23 and FY24, providing a buffer for the rupee in uncertain times, supported by gains from high services exports, moderate oil prices, and the recent fall in import-intensive consumption demand.
It stated that this will safeguard the country's external finances and provide a cushion for the sector at a time when the Fed is likely to raise rates further.
It stated that India's increase in market share in both IT and non-IT services, whose demand has been triggered by the pandemic, as well as the fact that imports are now less expensive due to the easing of global commodity prices, is a critical development.