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As contact-intensive services have revived and there is growth in private consumption, economic growth is expected to improve in the coming months, the monthly economic review released by Finance Ministry on Saturday said.

The review noted that as external pressures will diminish, inflationary pressures are expected to wear down. India's GDP growth was 13.5 per cent in the first quarter of the current fiscal.

"Increase in private consumption and higher capacity utilisation in the current year has further reinvigorated the capex cycle to take the investment rate in the first quarter of 2022-23 to one of its highest levels in the last decade," it said.

Released by the department of economic services, it further noted that with the economic growth in the first quarter of the current fiscal much ahead of the pre-pandemic period, i.e. the first quarter of 2019-20.

"The real GDP in the first quarter of 2022-23 is now nearly four per cent ahead of its corresponding level of 2019-20, marking a strong beginning to India's growth revival in the post-pandemic phase, the review said.

It further said that sustained growth in government's revenues will also aid capital expenditure during the current fiscal.

Risks to growth and inflation trajectories persist as India is integrated with the rest of the world, the finance ministry said.

Core inflation may also remain sticky in the months ahead as companies pass on higher inputs costs to the consumer sooner than later.

Prudent fiscal management and credible monetary policy will be important to fulfil growth aspirations as they will ensure borrowing costs for the government and private sector decline, facilitating public and private sector capital formation.

During the winter months, heightened international focus on energy security in advanced nations could elevate geopolitical tensions, testing India's astute handling of its energy needs so far. In these uncertain times, it may not be possible to remain satisfied and sit back for long periods, it further noted.

Poor crop sowing for Kharif season is also a risk and this calls for some smart and deft management of stocks and prices, while at the same time not hampering exports, the review said.

Amid all this, aggressive asset monetisation at all levels of government will help lower debt stock and hence debt servicing costs, it noted further.