“Tightening of financial conditions by central banks to tame inflation has raised concerns regarding the exacerbation of corporate debt vulnerabilities, with corporates being already highly leveraged,” the ministry said, adding such concerns were limited for India.
Interest rate hikes by central banks typically impact a business’s ability to service debt, while pushing up refinancing costs and putting more corporate bonds at the risk of defaults.
As global commodity prices ease, the import of lower-value merchandise will further limit India’s current account deficit (CAD), which is expected to come in below the projections made at the beginning of the year, according to the report.
A rise in exports of services and a recent drop in import intensive consumption demand will also help lower India’s CAD in FY23 and FY24 as against estimates, the finance ministry added, providing a buffer to the rupee in uncertain times.
India’s merchandise and services exports rose more than 16% to $702.88 billion in April-February period from a year earlier despite a weakening global economy.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
