ADB pegs 2022-23 GDP growth at 7.5%
The HinduThe Asian Development Bank forecasts India’s GDP growth to moderate to 7.5% in 2022-23 from an estimated 8.9% in 2021-22, but will pick up to reach 8% in 2023-2024. Food prices In its Asian Development Outlook report released on Wednesday the bank stated that food prices were expected to rise in tandem with increasing commodity prices Higher public capital spending was expected to improve the efficiency of India’s logistics infrastructure, crowd-in private investment, generate jobs in construction and sustain growth, the bank said, emphasising that economic activity this year would hinge on catalytic effects of public investment. A key challenge “Inflation will accelerate and the current account deficit widen due to the surge in global oil prices,” it said, identifying the mobilisation of domestic resources as a key challenge at ‘all levels of government’ as India’s tax to GDP ratio of about 17% has been largely unchanged since the early 1990s. Higher debt pushes up interest rates, crowds out private investment, and results in a low-growth and a less sustainable debt path,” the bank warned, mooting the implementation of the 15th Finance Commission’s recommendations to put the States’ finances on a sounder footing.