Year-Ender 2022: Parameters That Shaped Indian Economy

Bhubaneswar: 2022 has been challenging for India from various economic perspectives. On one hand, soaring inflation in India posed severe challenges to the masses, on the other hand, the Reserve Bank of India (RBI) left no stone unturned to address issues like falling foreign exchange (forex) reserves of the country and depreciating value of rupee against US dollar.

With just a few days left for the calendar year to end, here are a few parameters that defined and shaped the Indian economy in 2022.

GDP growth rate 

The latest GDP growth numbers for the September quarter raised eyebrows as growth for Q2 stood at 6.3 per cent. While the Reserve Bank of India (RBI) in the latest monetary policy announcement predicted GDP growth to be 6.8 per cent, concern over the GDP continued. The year started with low GDP growth (4.1 per cent) but the quarter ending in June brought some respite as it surged to more than 13 per cent.

Forex reserves

The central bank initiated quite a few measures to cope up with the skyrocketing value of the US dollar against the Indian rupee. One of the measures included selling dollars, which led to the fall in the forex reserves. Subsequently, the RBI endeavoured to maximize foreign inflows to augment the forex reserves. After a downtrend since August, the forex reserves have now surged by $6.56 billion and recorded the highest jump in the past year.

Soaring inflation

Inflation was one of the major factors that affected the Indian economy in 2022. The country’s retail inflation measured by the Consumer Price Index (CPI), dropped to an 11-month low of 5.88% in November 2022 after RBI raised the repo rates several times since April. There was an enhanced concern as the RBI failed to bring down the inflation rate for a few months despite repeated rate hikes. The accepted rate of inflation is supposed to be at 6 per cent, but the limit was breached in January and spiked to 7.79 per cent in April.

USD-INR exchange rate

The rupee breached the 80 level versus the dollar for the first time on July 19, 2022, as crude oil prices soared in the international market on July 18. The average exchange value has mostly been around Rs 80.74 this year, although, it touched an all-time high of Rs 83.002 on October 22.

Import-Export

India’s exports witnessed a massive fall in 2022 and the total export fell by more than 25 per cent between June and October 2022. However, there was a slight rise in the numbers in November. Similarly, imports in India also faced a downtrend.

Per capita income

This is one of the economic indicators that showed a positive trend this year. The per capita net national income, both in terms of constant price and current prices, went up by more than 8 per cent and 16 per cent respectively. Although, it is yet to reach the pre-Covid level.

Unemployment

The unemployment rate rose by more than 1.4 per cent for India between January and November 2022. At nearly 10 per cent, the unemployment rate touched its highest in August this year.