The International Monetary Fund (IMF) last week projected that the Indian economy will grow at a moderate pace of 6.8 percent in the financial year 2022-23 and 6.1 percent in the next financial year. This projection is based on the "very difficult" external environment the country is facing. No doubt, at a time when the world is staring at a recession, it is a big question – how is the economy likely to perform in 2023?

As the year comes to a close, there are several external challenges facing India, including geopolitical tensions, reduced international cooperation, food and energy crises and worsening Covid situation in several countries. IMF has cut global growth projection to 3.2 percent in 2022 and 2.7 percent in 2023. In this scenario, it will not be an easy task for India to remain as a bright spot in an otherwise dark global economic horizon.

IMF cautions about these external headwinds, but a Finance Ministry source recently claimed that several measures have already been taken to stabilize the domestic economy, including a host of reforms, such as increase in capex, expansion of the PLI scheme to new sectors, push to manufacturing, power sector reforms and all-round support to MSMEs. Experts point out that India must continue on the reform path to ensure better days ahead.

It is also important to take urgent steps to lend a helping hand to the export sector, which has started to face the heat of toughening global trade conditions. According to latest reports, the Centre has started brainstorming sessions with industry on how to expand India’s product basket and look for overseas markets beyond the traditional markets of the US and the EU. Such efforts are welcome.