MUMBAI: India is expected to maintain its place as the world’s fastest growing major economy this year, according to economists.
Various factors are helping to drive this growth, including a boost in government spending and a vibrant services sector.
Its robust performance last year alone accounted for more than three-quarters of South Asia’s growth, the fastest among emerging market and developing economy regions, according to the World Bank.
However, inflation remains a concern for business owners in the world’s most populous country.
CONCERNS OVER INFLATION
While business owners are glad that India’s economy is back in full swing, they are also worried about inflation, with India’s consumer price index (CPI) hovering above 4.25 per cent in 2023.
Among them is Mr Aftab Ansari, who has run a popular food joint in Mumbai’s suburbs for more than 20 years.
“It shouldn’t get more expensive than this. If prices keep rising, then the number of customers will fall, and (my) business will take a hit,” he told CNA.
India is a consumption-driven economy, and while it is benefiting from rising incomes, the World Bank has warned that growth from consumer spending could taper off as the effect of post-pandemic pent-up demand wears off.
As food inflation remains stubbornly high, spending particularly among low-income households could be constrained.
Headline inflation is expected to remain above 4 per cent until March this year, and average 4.8 per cent from April onward, according to economists. Source: CNA
