Indian Central Bank Estimates GDP at +7%

India continues on its path and expects GDP to grow by about 7% in the next fiscal year. This is detailed in the State of the Economy document from the Reserve Bank of India (RBI) and confirmed by Shaktikanta Das, Governor of the Central Bank of India, in Davos during a meeting of the Confederation of Indian Industry. However, in the fiscal year ending March 31, GDP growth should be 7.3%, the best result among the world’s major economies.

The central bank expects steady and sustained growth over time, while inflation should be around 4.5%, which is considered normal for New Delhi’s economy. In any case, Shaktikanta Das emphasized that the trend of food prices should be taken into account due to the rising prices, which can adversely affect the overall inflation.

RBI also emphasized that recent attacks on ships transiting along the Red Sea route, which forced them to switch to the longest and most expensive route around Africa, could put pressure on global supply chains, making the short-term outlook for Indian trade very uncertain.

Italian economic newspaper Il Sole 24 Ore reports some uncertainty regarding India’s economic growth and its distribution among the population. Indian economists, according to the financial newspaper, are divided among those who criticize the government’s economic policies that favor big industry and the wealthiest groups, creating income inequality, as evidenced by the rapid growth of some luxury goods sectors, such as German car brands. On the other hand, economists closest to the Narendra Modi government also emphasize rising indicators (related to some food and consumer goods) that would show a widespread improvement in the well-being of all Indians, including the less well-off classes.