The fiscal year in India begins on April 1 and ends on March 31.
India is the world’s fifth largest economy and recently overtook China to become the world’s most populous country.
The country’s economy managed to register a strong growth of 9.1% in the financial year 2021-2022.
But like other countries, the economy has been hit by adverse global conditions, including tightening global financial conditions, the war in Ukraine and geopolitical tensions.
India imports more than 80% of its crude oil, which has seen sharp increases due to the Ukraine crisis.
India’s economy also grew by 6.1% in the fourth fiscal quarter, which runs from January to March, compared to the same period last year, according to the National Statistics Office.
During the same period, China’s economy grew 4.5% year-on-year, according to the National Bureau of Statistics, while the US Department of Commerce said growth in the United States was 1 .1%.
The Indian economy saw growth in financial services and real estate, compared to the previous year, while the manufacturing sector grew at a much slower pace.
The quarterly and annual figures were slightly above market expectations, which were 5.5% for the quarter and 7.0% for the 2022-2023 financial year.
Economic analysts believe that government spending and domestic consumption have also helped keep India’s economy strong.
World Bank country director Auguste Tanu Kwame said in April that the economy “continues to show strong resilience to external shocks.”
He also explained that “despite external pressures, India’s service exports have continued to rise and the current account deficit has narrowed.”
Lower oil prices at the start of the year, combined with a boom in the services sector, drove growth in the quarter.
India’s services sector hit its highest level in nearly 13 years in April.
In recent months, inflationary pressures have also receded, with the Reserve Bank of India raising interest rates from 4.0% to 6.50% between May last year and February before stopping them in April.
Inflation fell to 4.70% in April, within the central bank’s target of 2.0 to 6.0%.
Looking ahead, the Reserve Bank expects gross domestic product to grow 6.5% in fiscal year 2023-24, in its annual report released on Tuesday, noting lower inflation risks. .
The International Monetary Fund expects India’s economy to grow by 5.9% in the financial year 2023-24.
Daniel Lee, head of global economic studies at the International Monetary Fund’s research department, described the country in April as “one of the bright spots in the global economy.”
Soumya Kanti Ghosh, chief economic adviser at the State Bank of India, said in a note on Friday that the manufacturing sector is expected to rebound while increased government spending “will bolster job creation and demand.”
But analysts have warned that the unemployment rate, which has risen this year and reached 8.11% in April, according to data from the Indian Economic Monitoring Center, could weigh on the economy.
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