India to remain among fastest growing economies: HDFC chairman | The Financial Express

India to remain among fastest growing economies: HDFC chairman

The Reserve Bank of India (RBI) has estimated a 7% GDP growth in FY23, with the economy growing between 6.1-6.3% in Q2FY23.

India to remain among fastest growing economies: HDFC chairman
The growth is likely to be led by growing middle class, higher per capita income, growth in services sector and booming stock market, Parekh said citing a research report. (IE)

Housing Development Finance Corporation chairman Deepak Parekh on Monday said that India will remain one of the fastest growing economies despite the spillover of global slowdown. The Indian economy may grow slightly below 7% in 2022 while in comparison, the global growth is estimated to fall to 3.2% in 2022 from 6.1% in the previous year and further contract to 2.7% in 2023.

“India will still remain amongst the fastest growing major economies in the world. GDP growth for 2022 may be slightly lower than 7%, but that is no reason for disappointment,” Parekh said speaking at an event organised by The Institute of Chartered Accountants of India.

The Reserve Bank of India (RBI) has estimated a 7% GDP growth in FY23, with the economy growing between 6.1-6.3% in Q2FY23.

Also read: India’s Q2FY23 GDP to fall by half from Q1, still beat RBI’s estimate; services, capex to cushion downfall

India can grow from a $3.4 trillion economy to a $ 7.5 trillion economy in the five years, he said. The growth is likely to be led by growing middle class, higher per capita income, growth in services sector and booming stock market, Parekh said citing a research report.

The government initiatives such as increasing affordable housing, rollout of 5G services, renewable energy and Gati Shakti programme will aid in development of the economy and support the services sector, whose share in the GDP is expected to grow to 64% in 2031 from 55% as of now.

India has not decoupled itself from the global economy and still imports close to 85% of its crude oil requirements, he said. However, it has diversified the import basket in order to minimise the impact of rising oil prices, he added. The global prices of crude oil breached $120 per barrel as an after effect of the war in Ukraine, which was a major cause for higher-than-expected inflation in India.

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The CPI inflation cooled down to 6.77% in October from 7.4% in September from 7% in the previous month, still higher than the upper tolerance limit set by the RBI. While the RBI has taken a more calibrated increase in interest rates, central banks of advanced economies had to take steeper rate hikes of 75 basis points for five consecutive times, Parekh said. On a global level, inflation is estimated at 8.8% for 2022 and is projected to settle down to more acceptable levels of 4.1% only by 2024, he added.

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First published on: 22-11-2022 at 00:15 IST