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Finance ministry report says resilient domestic demand to give impetus to Indian economy

Finance ministry report says resilient domestic demand to give impetus to Indian economy

Finance ministry report says resilient domestic demand to give impetus to Indian economy
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By Jomy Jos Pullokaran  Nov 24, 2022 4:19:40 PM IST (Published)

The finance ministry report said the easing international commodity prices and new Kharif arrival are also set to dampen inflationary pressures in the coming months.

Resilient domestic demand, a reinvigorated investment cycle along with a strengthened financial system and structural reforms will provide the impetus to India's economic growth going forward, the Department of Economic Affairs said in its Monthly Economic Review for October 2022 on Thursday.

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However, the global slowdown may dampen India's exports businesses outlook.
The finance ministry report said the easing international commodity prices and new Kharif arrival are also set to dampen inflationary pressures in the coming months.
"So far in the current year, India’s food security concerns have been addressed and will continue to receive the utmost priority from the government," the report said.
Talking about hiring, the report said firms are likely to witness an improvement in upcoming quarters driven by a rebound in new business hiring as firms continue to benefit from the lifting of the COVID-19 restrictions and optimism engendered by the vigorous sales volumes experienced during the festive season.
"In a world where monetary tightening has weakened growth prospects, India appears well-placed to grow at a moderately brisk rate in the coming years on account of the priority it accorded macroeconomic stability," it said.
Also, continued macroeconomic stability of which fiscal prudence is a part and execution of various path-breaking policies such as Gati Shakti, National Logistics Policy and the Production-Linked Incentive schemes to boost the manufacturing share of employment lend further upside to India’s growth prospects.
Going forward, the current retail inflationary pressures are expected to ease aided by Kharif arrivals and pass-through of lower global commodity prices, also affirmed by RBI's inflation projections for Q3 at 6.5 percent and Q4 at 5.8 percent.
On the global outlook, the finance ministry said persistently high global inflation despite accelerated monetary tightening is increasing macroeconomic uncertainty, while hawkish monetary stances run the risk of tipping economies into recession.
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