Axis Bank Chief Executive Officer Amitabh Chaudhry said that expectations for growth might be tempered a bit and that he would be watchful over consumer demand in the Indian economy. Despite the recent robust growth, lenders need to stay vigilant about the economic outlook, he said.
According to a Financial Times report, Chaudhry said that forecasting has become difficult due to India’s post-pandemic recovery losing steam and due to global economic volatility.
He said that the private capital expenditure has picked up but not enough, and that the government is still spending a lot of money. The rate hikes could reach a point of inflection, which is “not far away”, he said, adding that growth can be impacted in that case.
The Reserve Bank of India is currently meeting to discuss the interest rate policy, beginning Monday. The Centre announced the sixth consecutive hike in February, when it was increased by 25 basis points.
Chaudhry said, in context of the collapse of a few Western banks, that he was not concerned about the stability of India’s banking system as the country’s banks are well-capitalised.
The recent World Bank report also expected the growth to moderate in the second half of the fiscal. It expected consumption to shrink, moderating growth to 6.3 per cent in FY24. Inflation too is likely to see a moderation to 5.2 per cent from 6.6 per cent, the World Bank said. While labour market outcomes have improved post-pandemic, job losses in manufacturing and construction during the pandemic have impacted growth rate.