Saudi Arabia may displace India from the title of the fastest growing major economy

India is expected to lose its title as the fastest growing major economy this year, amid weak demand at home and abroad.

This comes after the first official estimate released by the Indian Ministry of Statistics last Friday indicated that the gross domestic product (GDP) would grow by 7% in the fiscal year ending in March.

This compares with expectations of growth of 6.8% by the Reserve Bank of India, as well as the average estimate in a survey of economists conducted by “Bloomberg”, and viewed by “Al Arabiya.net”.

This performance follows a growth rate of 8.7% in the previous year, and will rank second after Saudi Arabia’s expected growth of 7.6%, thanks to gains from higher energy prices.

The Indian government is using advance estimation to prioritize spending in the upcoming federal budget on February 1, which will also be the last full-year spending plan for Prime Minister Narendra Modi’s government before elections in 2024.

India has had a good start to the current fiscal year, with expectations that pent-up demand will drive the recovery in Asia’s third-largest economy. But the optimism soon faded as unprecedented monetary policy tightening by central banks to curb soaring inflation was driving many advanced economies toward recession and dampening growth in others.

The Reserve Bank of India, which has raised its benchmark interest rate by 225 basis points so far this fiscal year, is not done tightening yet.

Most economists expect the central bank to raise another quarter point at its next policy review on February 8 as core inflation remains flat.