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Ficci's Economic Outlook Survey has said that India's Gross domestic product (GDP) is likely to grow at 7.4 per cent in the financial year 2022-23 with rising prices triggered by the Russia-Ukraine conflict posing as the biggest challenge to the global economic recovery. It said the Reserve Bank of India (RBI) is likely to start a rate hike cycle in the second half of 2022, while a repo rate hike of 50-75 bps is expected by the end of the current fiscal. The RBI is expected to continue supporting the ongoing economic recovery by keeping the repo rate unchanged in its April policy review.

According to the survey, the industry body said the latest round of Ficci's Economic Outlook Survey puts forth an annual median GDP growth forecast for 2022-23 at 7.4 per cent with a minimum and maximum growth estimate of 6 per cent and 7.8 per cent respectively. It said the median growth forecast for agriculture and allied activities has been put at 3.3 per cent for 2022-23. Industry and services sectors are estimated to grow by 5.9 per cent and 8.5 per cent, respectively. However, it said, the downside risks to growth remains escalated.

The survey said rising international commodity prices is the biggest risk emanating from the ongoing conflict as Russia and Ukraine are global suppliers of key commodities. The conflict, if continues for a longer period, will further hit supplies of major raw materials, including crude oil, natural gas, food, fertilizers, and metals. With India being a net importer to meet its energy requirements, the sharp rise in crude prices represents a significant shock to India's macro-economic framework. Moreover, the impact on economy is expected to be more serious if the conflict prolongs.