Inflation will not rise despite rising crude oil prices: GDP to grow 7.8%: Crisil forecast

crude oil price: India's economic growth (GDP) is projected to grow to 7.8 percent in fiscal 2022-23. Crisil credit rating agency said inflation would not rise sharply despite rising international crude oil prices.

 India's economic growth (GDP) is projected to grow at 7.8 percent in FY2022-23. Crisil credit rating agency says inflation will not rise sharply despite rising international crude oil prices. At the same time, it said that if the war between ukraine and russia continues, rising commodity prices and rising input costs will hurt economic growth. With the current fiscal year ending on the 31st of this month, the central government expects GDP growth of 8.9%.

Crisil report

Dharmakirti Joshi, Chief Economist, Crisil Ratings, said in a statement on India's Economic Growth 2022-23: 

Infrastructure projects

We forecast India's economic growth to be 7.8 per cent in FY2022-23. However, to achieve this goal, the central government needs to invest more in infrastructure projects and encourage private investment. Both of these are key factors for economic growth. 

At the same time, if the war between russia and ukraine continues, the cost of goods will increase and the cost of input will increase. Then, achieving economic goals will be difficult.

Inflation

Inflation in india has been a concern. But with crude oil prices averaging up to $ 90 a barrel in the Russia-Ukraine affair, inflation in india should be a concern. The Reserve Bank's control level will remain at 5.8%, not rising above 6%. 

At the same time, the international market environment is tense and it will be difficult to achieve India's economic growth target if crude oil prices do not fall.

Double digit

In 2012 and 2014, the price of crude oil in the international market was $ 110 per barrel. At that time the level of inflation in india was in double digits. But, such situations will not come up again. Inflation will be under control as more agricultural produce and more food grains are needed. 

Many people have lost their jobs due to corona damage. The central government should also introduce new employment schemes to increase employment and consumption for them. In doing so, consumption will increase and economic growth will accelerate. 

Current account deficit

The current account deficit is likely to widen to 2.2% in the current financial year as international crude oil prices continue to rise. If the price of crude oil rises by $ 10 per barrel, there will be a deficit of 40 points in GDP.