Special Report :
While Bangladesh reserves dipped below $30 billion (as per IMF formula below $22 billion), India’s foreign exchange reserves have grown for a third consecutive week, reaching $599.53 billion (India conforms to IMF formula) for the week ending May 12, their highest level since June of the previous year, according to the Reserve Bank of India (RBI). India’s gold reserves also saw a significant increase. As a result, the reserves are now equivalent to 10.4 months of import cover, an increase from 8.9% in October 2022.
India’s exports of goods and services could reach $900 billion in the current financial year, up from $770 billion in the previous year. The Federation of Indian Export Organisations (FIEO) predicts that merchandise exports could expand to between $495 billion and $500 billion, while services exports could touch $400 billion in the year ending March 2024. However, India’s Trade Minister has warned of tough times ahead due to the potential impact of the war in Ukraine and a global slowdown.
Despite these challenges, India’s economy is expected to grow by 6.7% in 2024, bolstered by resilient domestic demand. This forecast is despite expected higher interest rates and weaker external demand, which may impact investment and exports.
The UN’s World Economic Situation and Prospects mid-2023 report anticipates a deceleration in inflation in India to 5.5% in 2023 due to moderating global commodity prices and slower currency depreciation.
The report also highlighted revised growth forecasts for other economies. The US economy is expected to grow by 1.1% in 2023 due to resilient household spending, and the EU’s economy is projected to grow by 0.9% due to lower gas prices and robust consumer spending. China’s growth forecast for the year has been revised upwards to 5.3%, thanks to the easing of COVID-19-related restrictions.
