CEA V Anantha Nageswaran expects India’s inflation to moderate to 5% in FY24, economy growth prospects solid

Chief Economic Adviser  (CEA) V Anantha Nageswaran on Wednesday said India's inflation is expected to ease to 5% in the financial year 2023-24. After better-than-expected GDP growth of 7.2% in FY23, he also believes the country's economy can look for another year of solid economic performance.

While briefing on GDP data for Q4 of FY23, Nageswaran told PTI that the risk to the projected 6.5 percent GDP number is evenly balanced and there is a good chance of this number may be exceeded in the current fiscal.

He added, "So, we are very pleased to have been able to present a story of sustained economic momentum combined with macroeconomic, financial, and fiscal stability, and we look forward to another year of solid economic performance by India."

Read here: Q4 GDP growth of 6.1% a big surprise, overall FY23 growth at 7.2%; key highlights here

On Wednesday, the NSO office released India's gross domestic product (GDP) data for January to March 2023 quarter. The economy recorded significant growth and merrier-than-estimates. In Q4FY23, GDP growth is at 6.1% compared to the 4.4% growth rate witnessed in Q3.

Overall, the growth in the FY23 fiscal is better than expected at 7.2%. However, the FY23 growth has slowed down from 9.5% growth in FY22.

Read here: India's Q4FY23 GDP growth pegged at 6.1% YoY despite higher interest rates and weaker real income growth: Economists

For inflation, CEA said, inflation is expected to moderate to 5% in current financial year.

In April 2023, the consumer price index (CPI) inflation slowed steeply to 4.7% as against 5.7% in March month. This would be the second consecutive month where inflation has stayed below RBI's upper tolerance limit of 6% --- hinting at more pause in interest rate hikes.