Economic Survey 2023: Inflation to behave well in FY24, says CEA

Chief economic adviser V. Anantha Nageswaran today said inflation may not be as big a problem in the next financial year as it was in 2022, even though uncertainties remain. Addressing the media on the Economic Survey 2022-23, Nageswaran says he expected inflation to remain well-behaved in 2023-24 with upside risks.

Pointing the Reserve Bank of India (RBI) has projected inflation to remain lower than the 5% range in the next financial year, Nageswaran said, "We expect if the global economy slows down as IMF and many people project, then commodity prices should retreat on the back of the monetary tightening. In that case, many of the analysts in India are expecting a much lower wholesale price index in the next financial year.”

“So the baseline assumption is that inflation should not be as big a problem as it was in 2022 but we would concede the uncertainties still remain high. We expect the inflation to remain well behaved in 2023-24 with upside risks,” he added.

On being asked what level of oil prices will have an impact, if any, on the GDP growth projection of 6-6.8% in FY24, Nageswaran says it is difficult to predict a number for the oil price. “The RBI takes a number that is below $100 a barrel. We can live with that number and achieve the growth rate that we have projected in the survey. The uncertainties related to oil markets are tremendous. As long as they are at a number that is less than $100 a barrel, I think the real GDP growth projections will remain undisturbed,” he added.