The government is concerned that India's export growth will slow down in view of the global recession

New Delhi: The government expects India's export growth to remain sluggish this year, keeping in mind the forecast of a sharp slowdown in the country's major export markets in the current year.

Global trade growth slowed in 2022 and will remain low in 2023. A report of the Ministry of Finance said that due to the decrease in production at the global level, there will be a further decrease in trade both in terms of volume and value.

High frequency indicators are showing that global demand is slowing down due to tightening in monetary policy. Several global agencies have predicted a slowdown in global growth.

In addition to monetary policy tightening, the Russia-Ukraine war will further weaken global growth, the report also noted. Inflation levels are likely to moderate in 2023 and 2024, but geopolitical tensions and consequent supply chain disruptions will not abate. Despite the slowdown in export growth, the International Monetary Fund and the World Bank have predicted that India will become a fast-growing country in 2023. The International Monetary Fund has estimated the growth rate at 6.10 percent while the World Bank has estimated it at 6.60 percent.

If the El Nino forecast holds true, India may see monsoon rainfall deficit and not only lower agricultural production but also higher prices of agricultural produce.

In the current financial year, the average level of inflation in India is 6.50 percent while in the financial year 2023-24 this figure is likely to be 5.30 percent.