He said pent-up demand in the system hasn’t yet faded out, as the economy has been growing slower than its potential rate of about 6-6.5% in the last three years due to the pandemic.
Rural demand, too, is growing, albeit at a slower rate than urban demand, he said. These should support growth, he indicated.
The CEA‘s statement comes after latest data showed that economic growth slowed to 4.4% in the third quarter of this fiscal, against 6.3% in the previous quarter, partly due to the adverse base effect. However, the National Statistical Office has retained its 7% growth forecast for the entire fiscal, with an implied growth rate of 5.1% for the fourth quarter. The latest Economic Survey has projected a growth rate of 6.5% for FY24.
“(In the medium term) We have two important tailwinds in our favour. One, is that the financial sector balance sheets are well repaired and the other is the strong digital public infrastructure,” he said.