India’s status as world’s fastest-growing major economy will be short-lived – Reuters poll

It is possible India It posted strong double-digit economic growth last quarter, but economists polled by Reuters The rate more than halved this quarter and will slow further by the end of the year According to the latest survey released on Monday, interest rates will rise.

Key results

YesGrowth is forecast to slow to 6.2% this quarter YOY from an average forecast of 15.2% in the second quarter, before easing to 4.5% in October-December, is mainly supported by year-ago statistical comparisons rather than any fresh momentum.

The median growth expectation for 2022 was 7.2%, according to a Reuters poll conducted between August 22 and 26, but economists say the strong growth rate masks how quickly the economy is expected to move. It will be slower in the coming months.

Despite the central bank’s target range of 2% to 6%, inflation was expected to average 6.9% and 6.2% this quarter and next. Quarter of 2023. This is roughly in line with the central bank’s projections.

The economy is under inflationary pressure due to the weakness of the rupee, which has traded near 80 to the US dollar for months, a level the central bank has defended in currency markets by selling dollar reserves.

A recent Reuters poll showed India’s current account deficit widening to 3.1% of GDP this year, the highest in at least a decade, which could put further pressure on the currency.