India to be a major contributor to global economic growth in 2023: Report

The participation will be driven by strong domestic demand and government spending

March 29, 2023

The government’s efforts to increase disposable income and boost consumption through discretionary spending are key drivers of growth

Increased capital expenditure and reduced compliance burdens are expected to stimulate investments and job creation

Strong credit growth and financial market resilience are expected to support investments

The Reserve Bank of India projects inflation at 6.5% for 2022-23 and 5.3% for 2023-24

India will be a major contributor to global economic growth in 2023, driven by strong domestic demand and government spending according to KPMG in its Global Economic Outlook report.

Despite sluggish growth of 4.4% in the last quarter of 2022, compared to 6.3% in Q3, the report highlights the Union Budget 2023-24’s efforts to increase disposable income and boost consumption through discretionary spending as key drivers of growth. 

Additionally, increased capital expenditure and reduced compliance burdens are expected to stimulate investments and job creation. 

While India’s unemployment rate (standing at 7.5% in February 2023) and growing inflation (increased by 6.5% in January 2023 driven by high food prices) remains a concern, strong credit growth and financial market resilience are expected to support investments, the report further added. The Reserve Bank of India projects inflation at 6.5% for 2022-23 and 5.3% for 2023-24.

Source: Business Standard

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