Year Ender 2022: Top 8 parameters that shaped the Indian Economy this year
Indian economy faced several ups and downs in 2022 due to issues like inflation, falling value of INR, rising unemployment and many more.
The year 2022 has been challenging for India from various economic perspectives. While, on one hand the soaring inflation in India posed severe challenges to the masses, on the other hand, the Reserve Bank of India (RBI) left no stone unturned to address issues like falling foreign exchange (forex) reserves of the country and depreciating value of Rupee against US dollar.
With just a few days left for the calendar year to end, here are the top eight parameters that defined and shaped the Indian economy this year.
1. GDP growth rate
The latest GDP growth numbers for the September quarter raised eyebrows again as growth for Q2 stood at 6.3 per cent. Although, the RBI in the latest monetary policy announcement predicted GDP growth to be 6.8 per cent, yet the concern over the GDP continued. Although the year started with low GDP growth (4.1 per cent) but the quarter ending in June brought some respite as it surged to more than 13 per cent.
2. Forex Reserves
The RBI took several measures to cope up with the sky rocketing value of US Dollar against the Indian Rupee. One of the major measures included selling dollars, which led to the fall in the forex reserves. Then, the RBI tried to maximize foreign inflows to augment the forex reserves. After witnessing a downtrend since August, the forex reserves have surged by $6.56 billion (for the week ending October 28) and recorded the highest jump in the past one year. India's forex reserves hit several lows in the past few months, including dropping to their lowest levels since July 2020.
3. Soaring Inflation
Inflation was one of the major factors that affected the Indian economy this year. The country's retail inflation measured by the Consumer Price Index (CPI), dropped to an 11-month low of 5.88% in November 2022 after RBI raised the repo rates several times since April.
Concern grew as the RBI failed to bring down the inflation rate for a few months despite repeated rate hikes. The accepted rate of inflation is supposed to be at 6 per cent, but the limit was breached in January and spiked to 7.79 per cent in April.
4. USD-INR exchange rate
The rupee breached the 80 level versus the dollar for the first time on July 19, 2022, as crude oil prices rose in the international market on July 18. The average exchange value has mostly been around Rs 80.74 this year, although, it touched an all-time high of Rs 83.002 on October 22.
India’s exports witnessed a massive fall this year, and the total export fell by more than 25 per cent between June and October 2022. However, there was a slight rise in the numbers in November. Similarly, imports in India also faced a downtrend.
6. Monetary Policy rate
The central bank raised the repo rate by 225 basis points between April and December to cope up with the soaring inflation. While the repo rate hike brought some relief to those with investments in fixed deposits and other forms of deposits, it became a growing concern for loan borrowers.
7. Per capita income
This is one of the very few economic indicators that showed a positive trend this year. The per capita net national income, both in terms of constant price and current prices (calculated with the effect of price inflation), went up by more than 8 per cent and 16 per cent respectively. Although, it is yet to reach the pre-Covid level.
The unemployment rate rose by more than 1.4 per cent for India between January and November 2022. At nearly 10 per cent, the unemployment rate touched its highest in August this year.
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