India’s GDP Estimate: There has been an estimate about India’s economy, which may deepen the clouds of apprehension on the forecast of its fastest growing. According to the Trade and Development Report 2022 of the United Nations Conference on Trade and Development (UNCTAD), India’s economic growth rate ie GDP growth may fall to 5.7 percent this year, which came to 8.1 percent in the year 2021. This has been cited by high financing costs and weak social spending. Not only this, it has also been said in this report that in the year 2023, India’s GDP growth may come down to 4.7 percent.
India’s growth rate is declining – UNCTAD
In the year 2021, India’s GDP has been able to show growth at the rate of 8.2 percent, which has been the strongest among the G-20 countries. However, according to the UNCTAD report, as the disruption in the supply chain eased, rising domestic demand turned the current account surplus into a deficit and there is a decline in the growth rate.
Trade deficit widening – a sign of decline in GDP
In the recent times, it has been seen in the country that the production linked incentive scheme launched by the government is encouraging corporate investment, but rising import bills for fossil energy or fossil fuels are increasing the trade deficit. Due to this there is a decline in the import coverage capacity of the country’s foreign exchange reserves. Therefore, in the same report, it has been said that financial activities are hampered by high financing costs and weak public expenditure, so the GDP growth rate is expected to decline to 5.7 percent in 2022.
These are the efforts of the Government of India
Going forward, the Government of India has announced to increase capital expenditure, especially in the rail and road sector, but in a weak economy, there will be pressure on policy makers to reduce financial inequality. Due to this, there may be a situation to channelize the already falling expenditure in other places. The UNCTAD report further states that India’s economy may come down to 4.7 percent GDP growth in 2023 due to all these reasons.
Russo-Ukraine war changed the situation
Various developments in the wake of Russia’s invasion of Ukraine, including US sanctions on oil imports from Russia and shipping insurance for Russian oil exports, have put more pressure on global oil markets and since India is a major importer of oil. , a related effect has also been observed on this.
China’s GDP is projected to grow at 5.3 percent in 2023
In the UNCTAD report, China’s GDP is estimated to be 3.9 percent in the year 2022, which was at 8.1 percent in 2021, it is estimated to grow by 5.3 percent next year. China and Egypt account for 38 per cent of the imports of goods, while India’s imports account for more than 50 per cent of food and fuel items. Due to its effect, the import of high-priced goods increases, due to which the trend of increasing domestic prices is seen.