Indian exports to see a lukewarm growth in 2023: Report

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India’s exports may see a warm growth this year as the country’s major export markets are forecast to decline sharply in 2023, the government said.

In 2022, the global trade growth fell, and it is expected to remain low in 2023 with a further decline in volume and value of trade on the back of slowing global output,” India’s Ministry of Finance said in monthly economic report.

As per the report, High frequency indicators suggest monetary tightening has started weakening global demand and this may continue in 2023 as various agencies have forecasted a decline in global growth.

The monthly economic report released on Thursday also highlights that Besides monetary tightening, uncertainties from the lingering pandemic and ongoing conflict in Europe may further dampen global growth.

The report further adds that While inflation risks look set to diminish in 2023/24, geopolitical tensions and consequent supply chain disruptions may not.

Despite the prospect of tepid export growth, the International Monetary Fund (IMF) and the World Bank project India to be the fastest-growing major economy in 2023, the report said.

As estimated by IMF India will grow at 6.1% in 2023 while the World Bank estimates the country’s growth for next year at 6.6%.

If El Nino predictions are accurate, monsoon rains in India could be deficient leading to lower agricultural output and higher prices, the report said

The Reserve Bank of India is mandated to keep retail inflation within its tolerance band of 2%-6%. Data released last week showed India’s annual retail inflation in January rose above the central bank’s upper threshold for the first time in three months to 6.52% from 5.72% in December.