Russia-Ukraine Crisis: Know why the pace of improvement in the Indian economy is slow, will the Russia-Ukraine crisis increase inflation

Russia-Ukraine Crisis: Know why the pace of improvement in the Indian economy is slow, will the Russia-Ukraine crisis increase inflation

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new Delhi. The pace of recovery of the Indian economy, which is recovering from the effects of the third wave of the pandemic, is still slow. To become a five trillion dollar economy, the GDP growth rate is not as fast as it should be. There are many reasons for this. Business activity came to a halt earlier this year due to a spike in Omicron’s cases, which hit recovery. Now the risk of rising commodity prices has increased amid Russia’s invasion of Ukraine (Russia-Ukraine Crisis).

According to Bloomberg’s survey estimate before the government’s GDP data coming on Monday, today, by March 31, 2022, the country’s economic growth rate can reach 9.1 percent. This is the fastest growth of GDP among the major economies of the world. However, this is slightly slower than the statistics ministry’s estimate of 9.2 per cent last month. The main reason for this is the third wave of the epidemic and external exposure. The rising commodity prices due to the Russia-Ukraine crisis are also responsible for this.

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Investment and employment will get a setback

ICICI Bank Ltd. Economist Sameer Narang says that the slow growth rate of GDP can cause a setback to investment and employment. Due to inflation, there is increasing pressure on the fiscal and monetary policy front. The pace of manufacturing is slow in Asia’s third largest economy. Omicron’s influence is also affecting business. Geopolitical tensions are also increasing the risk.

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Consumption will be affected with inflation

The report said that high crude oil prices can badly affect the inflation outlook. This will affect the income of the people, where private consumption is about 60 percent of the GDP. This will not only increase the current account deficit but also increase the pressure on the rupee. The rupee has been the worst performer among 11 Asian currencies in the last week.

Growth rate expected to be 5.9%

According to the quarterly data coming today, the growth rate is estimated to be 5.9 percent in the last quarter of 2021. In the same period of 2020, this figure was 8.4 percent. Earlier, Finance Minister Nirmala Sitharaman said that value chains are facing challenges and threats due to pandemic and other disturbances. This is not only increasing the problems of India, but its effect is also visible on other economies of the world.

Tags: Crude oil prices, GDP growth, Indian economy, inflation

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