A slowdown in private consumption and exports resulting in growth moderation

The Indian economy has been on a rollercoaster ride since the onset of the COVID-19 pandemic. It faced one of the harshest lockdowns globally, which resulted in a steep decline in economic activity. However, the country made a remarkable recovery in the second half of 2020 and the early months of 2021, driven by a strong rebound in exports and private consumption. The Indian economy grew by just 4.4 percent in the third quarter, but it has grown much faster in FY22 and FY21 than originally thought.

However, comments by top economists on CNBC-TV18 suggest that the growth momentum has started to slow down, and there are visible signs of moderation in some sectors.

In an interview with CNBC-TV18, Sonal Varma, MD and Chief Economist-India and Asia Ex-Japan at Nomura Financial Advisory and Securities (India) stated that "growth moderation could see a further decline," highlighting that the momentum is currently moderating. She pointed out that the slowdown in private consumption is becoming more visible, and exports and private consumption are leading to moderation. However, she also noted that the post-pandemic growth recovery is stronger than anticipated.