DELOITTE INDIA EXPECTS GROWTH COULD BE AS HIGH AS 7.2% THIS FISCAL YR

India's economic outlook appears optimistic as the country heads into a new year, with near-term growth potentially around 6.9 per cent-7.2 per cent, according to Deloitte India's recent economic outlook report.

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There is an underlying momentum that is building up in the Indian economy as seen in the improving economic fundamentals. India's current account deficit (CAD) was 1.9 per cent of GDP in FY2023 and is expected to be further lower in FY2024, says a Deloitte India report. Foreign exchange reserves remain at a comfortable level of INR 568 billion which is equivalent to over 10 months of import cover. Current inflation stands at 5 per cent which is albeit high as per RBI's target range, but much lower than what it used to be a decade back.

Improving economic fundamentals have buoyed the outlook and we expect India to grow between 6.9 per cent and 7.2 per cent over FY2023-24 in our baseline scenario, followed by 6.4 percent and 6.7 per cent over the next year. And, while the global economic scenario remains modest and will impact the Indian economy, the country will be able to navigate uncertainties better than the rest of the world, according to Rumki Majumdar, Economist, Deloitte India. However, the persisting inflation which recently moved back up to 5.6 per cent after showing signs of easing in the previous month is a matter of concern. High inflation is expected to persist till H2 FY2024 due to high food and volatile oil prices and soften thereafter, as per Majumdar.