Ficci survey lowers FY23 GDP growth to 7.4%

Industry body Ficci has pegged the FY23 GDP at 7.4% in its Economic Outlook Survey, while maintaining that the downside risk to the country's economic growth remains escalated. The survey mentions that the Russia-Ukraine conflict is likely to further aggravate price rise through imported commodities.

"The latest round of Ficci's Economic Outlook Survey puts forth an annual median GDP growth forecast for 2022-23 at 7.4% - with a minimum and maximum growth estimate of 6.0% and 7.8% respectively," Ficci said in a release. The survey was conducted in March and drew responses from leading economists representing industry, banking and financial services sector.

The median growth forecast for agriculture and allied activities has been put at 3.3% for 2022-23, according to the survey. On the other hand, industry and services sector are anticipated to grow by 5.9% and 8.5% respectively during the fiscal year, the survey added.

"However, it may be noted that downside risks to growth remain escalated. While the threat from the pandemic remains on fore, the continuation of Russia-Ukraine conflict is posing a significant challenge to global recovery," it said.

"The current conflict is expected to further aggravate the price rise through imported commodities. The estimate for average wholesale price index-based inflation in Q4 of 2021-22 has been put at 12.6 percent," Ficci said in a release.

On retail inflation, the survey pointed out that CPI-based inflation is projected at 6% in Q4 2021-22 and 5.5% in Q1 2022-23 and has a median forecast of 5.3% for 2022-23, with a minimum and maximum range of 5% and 5.7%, respectively. "CPI based inflation has been treading above the targeted range of the RBI in Jan/Feb 2022 and should see some respite in the forthcoming fiscal year. The unsustainably high international commodity prices are expected to level off going forward," said the Ficci release on the survey.

On the geo political front, the participants opined that while it is difficult to assess the exact impact of the conflict on global economy, much would depend on further continuation of the conflict and the ensuing policy responses. The sanctions imposed on Russia by European countries and the United States is having spillovers in both the real and the financial sectors.

"The overall situation remains volatile, and outlook is uncertain with risks amplified to the downside. According to indicative estimates provided by the participants, global growth could slow down by 50-75 basis points – further moderating the prospects of post Covid recovery," the Ficci release said.