Monday, December 26, 2022

India stands out in the global economic downturn; proceed with caution

India is standout nation in global gloom, caution ahead


 Delhi, India: The current economic recovery will probably get a boost in the new year, but major obstacles will come from global headwinds and the uncertainty caused by the Covid surge in China.


India has emerged as a standout nation amid the sharp slowdown in global growth. Estimates indicate that growth will likely be around 7% in 2022 and 2023 on the back of strong domestic demand.


After the bruising effects of the Covid waves, the economy has thus far staged an intelligent recovery. There are a number of signs that growth is getting back on track. While the Hold Bank of India (RBI) in its most recent financial approach audit has sliced its Gross domestic product development estimate to 6. Economists predict that growth will be around 7% in 2022 and 2023, or 8%, which is a respectable rate considering the likelihood of a recession in many nations.


In the new year, policymakers may face a number of obstacles. The initial is the sudden change in the Covid situation. In light of the surge in China and a few other nations, the government has swiftly taken preventative measures. India is expected to have a good vaccination record, but the situation in China will likely remain uncertain, necessitating careful economic management and vigilant surveillance.


The country's exports, which have already begun to lose momentum, will also face a significant challenge from the possibility of recession in several countries. However, there are a number of advantages that stand on their own. After the reopening of contact-intensive sectors, consumption has shown signs of a revival, the farm sector has remained resilient, and domestic demand remains robust.


"Compared to other emerging markets, India's economy is relatively more protected from global spillovers. India relies on its substantial domestic market and is less exposed to international trade flows. According to a recent World Bank report, India's external position has also improved significantly over the past decade.


The report, named 'Exploring the Tempest', finds that while the falling apart outside climate will burden India's development prospects, the economy is somewhat strategically situated to climate worldwide overflows contrasted with most other developing business sectors.


The most recent retail and wholesale price inflation data indicate a sharp fall, suggesting that inflation, which had become a major policy concern for India, is now appearing to be moderate. The RBI may be less likely to raise interest rates as a result of this. Measures to boost growth and protect the economy from global headwinds are also likely to be included in the Budget for 2023–24, which will be presented in February. According to economists, 2023 ought to be a year of consolidation, growth protection amid global challenges, and a close eye on any unanticipated storm.


"How versatile homegrown interest is will have a huge bearing on the amount we develop one year from now. According to D K Joshi, chief economist at ratings agency Crisil, "The emergence of the new strain of Covid in China adds to the list of downside risks to the global economy, including high inflation, rising interest rates, and the conflict in Ukraine."

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