Economic activity in India is gradually recovering after the recession caused by the spread of the omicron strain. Unlike previous waves of COVID-19, the Indian economic system has proved to be more resilient to risks due to more efficient supply chain management, increased digitalization and accelerated vaccination of the population.
India is on the way to a sustainable economic recovery thanks to an active nationwide vaccination campaign against COVID-19, which helped to reduce the significant negative effect of the third wave of the pandemic with minimal disruption to the mobility and economic activity of the population.
The policy of the Government of India to improve logistics infrastructure, incentives to promote industrial production and measures to increase farmers' incomes will contribute to the accelerated recovery of the country.
India's economy remains one of the fastest growing in the world. However, GDP growth is expected to decline in the coming years. According to IMF forecasts, the country's real GDP growth in 2023 is expected to reach 6.1%. At the same time, Oxford Economics lowered its forecast for India's GDP growth from 6.8% to 4.4% in 2023 due to weak indicators in the field of industrial production. The Central Bank of India forecasts growth of 6.8% in 2023.
The inflation rate in 2022, according to the IMF, was 6.9% compared to 5.5% in 2021, showing the highest level for 2017-2022. The main factor influencing this indicator is food inflation, the level of which remains unstable, which limits the efforts of the Central Bank of India to regulate inflation in the range of 2-6%. Nevertheless, inflation is expected to decrease to 5.1% in 2023, followed by a decrease to 4.0% in 2027.
Targets for the development of the Indian economy in 2023 (in accordance with the development strategy 2018-2022): GDP growth in real terms up to 4 trillion US dollars, the average GDP growth rate for 2018-2023 — at least 8%, the inflation rate — in the range from 2% to 6%, the ratio of investment to GDP — 36%, while the share of public investment should increase from 4% to 7%, total exports of goods and services — $ 800 billion, investments in R&D — at least 2% of GDP, the development of electronic sales channels for agricultural products, an increase in the growth rate of the mining sector from 3% in 2018. up to 14% by 2023, reduction of oil and gas imports by 10%, achievement of 100% digital literacy of the population, consistent reduction of pollutant emissions.
