CII expects GDP growth to dip this year on inflation, crude prices

The Confederation of Indian Industry (CII), India’s biggest industry association, has warned of a ‘soft landing’ for the economy in the current year due to high inflation, oil prices and slowing capital investments.

Addressing his first press conference after taking over as CII president, Tata Steel Vice Chairman B Muthuraman said CII expected Indian GDP growth to remain between 8-8.5%, lower than 8.5-9% estimated for the last one.

“Rising inflation has made it difficult to sustain current pace of growth,” Muthuraman said, adding that it would be prudent to expect a ‘soft landing’ for the economy.

Both industry and services would post growth rates about half a percentage point below their last year’s figures in the current one, he added. Agriculture is expected to do worse, growing 3-4% against 5.4% during last year.

“Even with this moderation in growth India will remain one of the fastest growing countries in the world,” Muthuraman said, adding that the softening will help prevent “overheating” and even higher inflation.

Wholesale prices have remained higher than usual, jumping around 10% over the past 12 months.

CII wants the government to target 10% GDP increase, adding that it is essential to keep employment generation in line with the demand for jobs.