Hiring expected to improve over coming quarters as India grows at moderate pace, Finance Ministry says

Nirmala Sitharaman

Hiring expected to improve over coming quarters as India grows at moderate pace, Finance Ministry says

Photo: BCCL

New Delhi: Even with a deteriorating global outlook, India will experience a moderately buoyant growth rate underpinned by resilient domestic demand, a pick-up in the investment cycle, a strengthened financial system and structural reforms.
Despite global monetary tightening, India will grow at a “moderately rapid rate” amid heightened fears of a looming global recession, the finance ministry said in its October Monthly Economic Review on Thursday.
The Ministry of Finance further noted that inflationary pressures will ease in the coming months with the arrival of kharif crops and, at the same time, employment opportunities will also increase with improved business prospects. He noted, however, that a rapidly deteriorating outlook for global growth, high inflation and deteriorating financial conditions have heightened fears of an impending global recession.

“The easing of international commodity prices and the arrival of new kharif should also ease inflationary pressures in the coming months,” he said.

Flagging U.S. monetary tightening as a “future risk,” the Treasury said it could lead to lower stock prices, weaker currencies and higher bond yields, which in turn could lead to lower increased borrowing costs for many governments.

The Ministry of Finance’s ‘October 2022 Monthly Economic Review’ said the fallout from the global slowdown could weigh on prospects for India’s export businesses, but our growth will be boosted by resilient domestic demand, a cycle of investment as well as a strengthened financial system and structural reforms.

“In a world where monetary tightening has weakened growth prospects, India looks well positioned to grow at a moderately strong pace in the years ahead due to its focus on macroeconomic stability,” indicates the report.

Regarding the country’s food security concerns, the ministry said these have been resolved so far this year. The ministry assured that the concerns and will continue to receive the highest priority from the government.

Regarding the employment situation, the ministry said that in India, the resumption of economic activities in all sectors has improved the overall employment situation in the country. Net payroll additions at EPFO ​​saw double-digit growth in September 2022, reflecting better formalization of the economy.

“Business hiring should see improvement over the coming quarters, driven by a rebound in new business hiring as businesses continue to benefit from the lifting of Covid-19 restrictions and the optimism generated by the strong sales volumes recorded during the holiday season,” the ministry said.

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