India's economy is expected to navigate rough global weather in 2023 due to resilient consumer demand, better corporate performance and abating of inflation, even as the year is likely to be full of challenges and opportunities, Assocham said on Monday.
"While the global outlook seems rather tough, the Indian economy is set to stay on steady ground, helped by strong domestic demand, a healthy financial sector and improved corporate balance sheets. Early signs of brighter prospects of Rabi crops point towards a robust performance of agriculture, leaving an improved second round effect for several connected industries like FMCG, tractors, two-wheelers, speciality chemicals and fertilisers," Assocham Secretary General Deepak Sood stated.
While there is an overwhelming consumer response to contact services like travel, hotels and transport, a positive domino effect is visible in transport, housing, power, electronics, discretionary consumer goods and automobiles, he added.
"Our domestic demand is bound to offset the risk of global demand slowdown...However, we need to be watchful about international currency fluctuations, particularly in Emerging Economies," Sood said.
As per the recent assessment shared by the Reserve Bank of India, the global economy is projected to grow by a mere 2.7 per cent even as some of the key developed economies face recession, being exasperated by their central banks' policies of monetary tightening, he noted.
To an extent, the impact of higher interest would be reflected in the balance sheets of Indian corporates as well. However, the corporate sector is expected to continue with the policy of deleveraging, taking advantage of a resilient stock market and reversal in commodity prices, Sood observed.
"Despite global headwinds, including recession, looming large in several economies, unabated geo-political situation, inflation, India is set to register an economic expansion between 6.8-7 per cent in the financial year 2022-23. Going forward, FY-24 should hold steady," the Assocham Secretary General said.