Overall economic activity has recovered to pre-pandemic levels & economy is well-poised for FY23, the survey says.Agencies
- Demand weakness, full recovery in exports, government consumption and gross fixed capital formation.
- Private consumption still struggling because of the impact of the pandemic
- Among sectors, services trade, hotels, transport, and communication are still below pre-pandemic levels.
INFLATION:
- Consumer inflation within target; high wholesale inflation is partly due to base effect and should ease out.
- Imported inflation a concern, especially from high energy prices
GOVERNMENT FINANCES:
- Strong rebound in government revenues in FY22.
- Govt will comfortably meet fiscal targets without cutting scheme spending or capex
EXTERNAL SECTOR:
- High forex reserves, sustained FDI and rising exports provide an adequate buffer against possible global liquidity tapering in 2022-23
FINANCIAL SECTOR:
- Banking system well capitalised and overhang of NPAs seem to have structurally declined.
- Capital markets robust, allowing risk capital mobilisation
KEY RISKS:
- Global environment uncertain, Omicron sweeping across the world
- Inflation has jumped across many countries
- Global central banks beginning to withdraw liquidity
- High energy prices