India's GDP growth estimated at 7.8% in FY2023; see why CRISIL reiterates its forecast?

On Thursday, CRISIL reiterated its December 2021 forecast of India’s gross domestic product (GDP) growth at 7.8 per cent in fiscal 2023.

The rating agency believes that the chance of a potential upside due to the early end of the mild third wave of COVID-19 will be offset by the ongoing geopolitical strife because of the conflict between Russia and Ukraine.

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"Spiking commodity prices, especially of crude oil, will have a bearing on India’s macros, including the current account deficit and inflation," Amish Mehta, Managing Director & CEO, CRISIL said while speaking at ‘India Outlook, Fiscal 2023’ which is CRISIL's flagship event.

Mehta further added, "The good part is, the health of the financial sector is on the mend, with better capitalisation, profitability and asset quality. That, and enhanced public spending on infrastructure, private investments driven by the Production-Linked Incentive scheme, and a chunk of green capex should deliver some good-quality tailwinds.”

The war between Russia and Ukraine is creating a dampening effect on global growth and pushing up oil and commodity prices. The risks to growth are also tilted to the downside.

Due to the Russia-Ukraine conflict, the domestic markets have also remained volatile. Furthermore, the rising prices of crude oil and gold, have also impacted the domestic markets. '