Representational view of a busy market in Hubballi, Karnataka. India continues to be the fastest-growing major economy
| Photo Credit: KIRAN BAKALE

Resilient growth, price stability and steady external sector outlook continue to support India’s promising economic performance amid uncertain global conditions, a Finance Ministry report said on Thursday.

Overall, India continues to be the fastest-growing major economy, with positive assessments of the growth outlook for the current financial year for India by international organisations and the RBI, the Monthly Economic Review for March said.

The IMF, in its April 2024 World Economic Outlook (WEO), has revised upwards its estimate of India’s real GDP growth for FY24 to 7.8% from 6.7% in its January 2024 update and 6.3% in its October 2023 WEO.

The report said the global economic growth landscape is seeing a gradual resurgence, marked by fading fears of recession and rebounding growth in major economies.

Geopolitical tensions remain a concern, but notwithstanding recent developments, risk perceptions have softened, offering a potential upside for growth, it said.

Talking about global economic growth recovery, the report said it is underway in major economies, although disparities persist.

“While the leading indicators signal increased economic activity and geopolitical tensions have eased slightly, recent conflicts continue to pose risks. Despite the global challenges, India stands out with its strong economic performance, highlighting broad-based growth across sectors and asserting its pivotal role in supporting the global growth trajectory,” it said.

Global slowdown led to a moderation in India’s merchandise exports and imports, it said adding that the slowing of trade has resulted in the merchandise trade deficit narrowing in FY2023-24, as exports have shown a smaller contraction than imports.

However, the non-petroleum and non-gems & jewellery merchandise exports have shown resilience with a sustained uptick in the last few months, growing at 3% in FY24.

Services exports expanded at the fastest pace in FY24, supported by rising software exports and business services exports.

Owing to these developments, it said, India’s current account deficit improved in the first nine months of 2023-24 compared to the corresponding period of the previous year.

India’s capital inflows saw a significant turnaround in 2023-24, and its foreign exchange reserves reached an all-time high in March 2024, sufficient to cover 11 months of projected imports and more than 100% of total external debt.