New Delhi April 3 2023: India’s unemployment rate climbed to a three-month high of 7.8% in March amid concerns a global slowdown will hurt Asia’s third-largest economy.
Urban joblessness remained elevated at 8.4%, compared with about 7.5% in rural areas, according to data from the Mumbai-based Centre for Monitoring Indian Economy. In February, the overall rate was 7.5%.
The uptick follows early signs of cooling demand in the $3.2 trillion economy, where policy makers have been battling runaway inflation like their peers in the rest of the world. The Reserve Bank of India is likely to raise its benchmark interest rate for a seventh consecutive time on April 6, according to forecasts by economists.
Higher borrowing costs are already weighing on India’s economy, data show. Growth unexpectedly slowed to 4.4% in the quarter through December. Economic expansion may be under pressure as the “full-blown impact” of the RBI’s 250 basis-point increase in interest rates since May gets transmitted to end-consumers, Crisil Ltd., the local unit of S&P Global Ratings, has said in a report.
Last month’s increase in unemployment is compounded by the simultaneous fall in the labor force participation rate, which slipped from 39.9% to 39.8%, CMIE Managing Director Mahesh Vyas told the Press Trust of India separately.
India, which may have already surpassed China as the world’s most populous nation, hasn’t been creating enough jobs, a problem that Prime Minister Narendra Modi has promised to address in his policy speeches.
