<p>India will be a $3.7 trillion economy in 2023, maintaining its lead over the UK as the fifth largest economy of the world, a Reserve Bank article said on Thursday stressing that the macro economic stability is getting entrenched.</p>.<p>Recent data arrivals indicate that the first milestone of monetary policy is being passed – bringing inflation into the tolerance band, said the article titled 'State of the Economy' published in the January bulletin of the RBI.</p>.<p>The objective during 2023 is to tether inflation therein so that it aligns with the target by 2024 – the second milestone, the said the article auhtored by a team lead by RBI Deputy Governor Michael Debabrata Patra.</p>.<p>"At current prices and exchange rates, therefore, India will be a $3.7 trillion economy in 2023, maintaining its lead over the UK as the fifth largest economy of the world," it said.</p>.<p>According to the IMF’s calculations, India will move into fourth place in 2025 and into the third place in 2027 as a $5.4 trillion economy.</p>.<p>The article said a slowdown in growth with possibilities of recession in large swathes of the global economy has become the baseline assessment even as inflation may average well above targets.</p>.<p>Emerging markets are appearing more resilient than in the year gone by, but their biggest risks in 2023 stem from US monetary policy and the US dollar.</p>.<p>"In India, the softening of commodity prices and other costs amidst strong revenues appears to have boosted corporate performance," it said.</p>.<p>The central bank said views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India.</p>.<p>Turning to early developments in 2023, the authors said macroeconomic stability is getting further entrenched. Recent data arrivals indicate that the first milestone of monetary policy is being passed – bringing inflation into the tolerance band.</p>.<p>The article further said fiscal consolidation is underway at central and sub-national levels, graduated to nurture the pace of the economic recovery.</p>.<p>Lead indicators suggest that the current account deficit is on course to narrow through the rest of 2022 and 2023, it added.</p>.<p>"...2023 may well be the opening ajar of a window in which India’s time on the world stage is arriving," it said.</p>.<p>In April 2023, India’s population will be the largest in the world, projected at 1.4 billion. A sixth of the increase of the world’s population of working age (15-64) people between 2023 and 2050 will be Indians.</p>.<p>Coupled with a median age of 28, this is India’s chance to seize the demographic dividend and herald its emergence as an economic powerhouse of the future," it added.</p>.<p>With the merchandise trade deficit reaching an all-time high of $83.5 billion in a quarter, and an increase in net outgo from the income account, the current account deficit (CAD) increased to 4.4 per cent of GDP in the second quarter of 2022-23. The CAD for April-June quarter of fiscal was revised down from 2.8 per cent to 2.2 per cent on account of downward adjustment in customs data.</p>.<p>Similar adjustments may impinge on the CAD for the second quarter of 2022-23 as customs data or imports are revised, the article said.</p>
<p>India will be a $3.7 trillion economy in 2023, maintaining its lead over the UK as the fifth largest economy of the world, a Reserve Bank article said on Thursday stressing that the macro economic stability is getting entrenched.</p>.<p>Recent data arrivals indicate that the first milestone of monetary policy is being passed – bringing inflation into the tolerance band, said the article titled 'State of the Economy' published in the January bulletin of the RBI.</p>.<p>The objective during 2023 is to tether inflation therein so that it aligns with the target by 2024 – the second milestone, the said the article auhtored by a team lead by RBI Deputy Governor Michael Debabrata Patra.</p>.<p>"At current prices and exchange rates, therefore, India will be a $3.7 trillion economy in 2023, maintaining its lead over the UK as the fifth largest economy of the world," it said.</p>.<p>According to the IMF’s calculations, India will move into fourth place in 2025 and into the third place in 2027 as a $5.4 trillion economy.</p>.<p>The article said a slowdown in growth with possibilities of recession in large swathes of the global economy has become the baseline assessment even as inflation may average well above targets.</p>.<p>Emerging markets are appearing more resilient than in the year gone by, but their biggest risks in 2023 stem from US monetary policy and the US dollar.</p>.<p>"In India, the softening of commodity prices and other costs amidst strong revenues appears to have boosted corporate performance," it said.</p>.<p>The central bank said views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India.</p>.<p>Turning to early developments in 2023, the authors said macroeconomic stability is getting further entrenched. Recent data arrivals indicate that the first milestone of monetary policy is being passed – bringing inflation into the tolerance band.</p>.<p>The article further said fiscal consolidation is underway at central and sub-national levels, graduated to nurture the pace of the economic recovery.</p>.<p>Lead indicators suggest that the current account deficit is on course to narrow through the rest of 2022 and 2023, it added.</p>.<p>"...2023 may well be the opening ajar of a window in which India’s time on the world stage is arriving," it said.</p>.<p>In April 2023, India’s population will be the largest in the world, projected at 1.4 billion. A sixth of the increase of the world’s population of working age (15-64) people between 2023 and 2050 will be Indians.</p>.<p>Coupled with a median age of 28, this is India’s chance to seize the demographic dividend and herald its emergence as an economic powerhouse of the future," it added.</p>.<p>With the merchandise trade deficit reaching an all-time high of $83.5 billion in a quarter, and an increase in net outgo from the income account, the current account deficit (CAD) increased to 4.4 per cent of GDP in the second quarter of 2022-23. The CAD for April-June quarter of fiscal was revised down from 2.8 per cent to 2.2 per cent on account of downward adjustment in customs data.</p>.<p>Similar adjustments may impinge on the CAD for the second quarter of 2022-23 as customs data or imports are revised, the article said.</p>