Page 3 - Policy Economic Report - February 2023

Policy and Economic Report:
Oil & Gas Market

Executive Summary

According to United Nations, global economy is projected to grow by 1.9% in 2023, lower than the 3%
growth in 2022 and projected to pick up to 2.7% in 2024. Although the lifting of COVID-19-related
restrictions in most countries in 2022 supported domestic demand recovery, the world has seen rising
inflation, weakened household and business spending, and slow trade growth as the key factors affecting
global financial conditions. Soaring food and energy prices and renewed supply shocks, caused by the
Russia-Ukraine war, have not only fueled a surge in inflation but also pushed up short- and medium-term
inflation expectations. In 2022, global inflation reached an estimated 9%, the highest level in the past two
decades. Upward price pressures will likely ease due to aggressive monetary tightening, but the global
inflation is projected to remain elevated at 6.5 % in 2023.

In case of India, the National Statistical Office (NSO) estimated India’s GDP growth slowed to 4.4%
between October to December 2022 quarter from 6.3% in the second quarter (Q2) of 2022-23. Low
private consumption coupled with lower government spending and a contraction in manufacturing are
key reasons for the slowdown in economic growth. Private consumption expenditure slowed sharply to
2.1 % in October-December from 10.8 % in the corresponding period last year and 8.8 % a quarter ago.

The Gross Value Added (GVA) in the economy grew 4.6% in the third quarter (Q3) of 2022-23, down from
5.5% in Q2, with manufacturing continuing to shrink for the second quarter, at a slower pace of 1.1%
compared to 3.6% in Q2.

Figure- Gross Value Added (GVA) for Indian economy

Source- NSO Page | 2
February 2023