Indian Economy: Despite rising inflation, rising current account deficit, and depreciating rupee, India will be the world’s fastest-growing economy in the current financial year. A senior government source said this. The source said that due to the increase in import bills, the trade deficit has increased and foreign exchange reserves have come down. This has prompted worries about the current account deficit increasing (CAD). But shortly a stabilization of the situation is anticipated.
He said that the government is continuously working with the Reserve Bank (RBI) to control inflation. “The ground level inputs suggest that edible oil and crude oil prices have moderated. Monsoon is expected to be good,” the source said. Inflation pressure is expected to ease in the coming times.
The economy will achieve rapid growth
It is interesting that retail inflation has continually been higher than the Reserve Bank of India’s desired objective (RBI). Inflation in June stood at 7.01 percent. The Reserve Bank has been entrusted with the responsibility of keeping inflation at 4 percent with a volatility of 2 percent and it has remained above satisfactory levels for six consecutive months. “There is no apprehension of a slowdown in the country. We are on a growth trajectory. The country will be the fastest growing country in the current financial year and the next financial year,” the source said.
The source said this amid the international situation arising out of the Russo-Ukraine war at the global level and rising tensions between China and Taiwan. Let us tell you that the Reserve Bank has estimated the GDP growth rate to be more than 7 percent for the current financial year. This is higher than the growth rate of any major economy. On the rupee, the source said, “The 7 percent depreciation in the rupee’s exchange rate against the US dollar is not a cause for concern and the government and the RBI are committed to handling the situation.” The government and the RBI are constantly monitoring the rupee.
Regarding the balance of payments crisis, he said that the prices of crude oil and electronic goods have come down. According to experts, the current account deficit will increase to 3.0 percent of GDP (Gross Domestic Product) in the current financial year, which was 1.2 percent last year. The price of crude oil has declined in recent days and is close to $ 95-96 per barrel. Last month it had risen to $110 a barrel. This has given relief to the importers.
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