State of the Economy. Where does India stand in the current global economic landscape?

The global economy is facing some significant challenges, with concerns about a potential lost decade due to the pandemic and slowing investment.  

In this episode of the State of the Economy podcast, Lokeshwarri SK is joined by Arun Singh, Global Chief Economist, Dun and Bradstreet, as they delve into the concerning growth and inflation figures from around the world and their implications for India.  

Singh begins by addressing the statement made by RBI Deputy Governor Michael Patra, who suggests that the 2020s could be a lost decade due to the pandemic, a slowdown in investments, and other structural challenges. While acknowledging these concerns, Singh also highlights several long-term developments that offer a counterargument. The rapid acceleration in technological innovation, infrastructure investments, and the global shift towards sustainability and environmental consciousness are reshaping various industries and driving job creation.  

The discussion then moves to inflation, a key factor influencing central bank policies and economic growth. In terms of inflation, central banks worldwide are committed to inflation targeting as a way to maintain credibility and stability in the markets. While inflation remains a concern, central banks have learned from past experiences and are determined to keep it under control.  

In terms of growth, the outlook varies across regions. The US is projected to experience modest expansion, with a growth rate of around 1% in 2023. The EU, particularly Germany, faces challenges due to geopolitical factors and energy transitions. The EU’s dependence on Russian energy and the push towards renewable energy create uncertainties. The UK also faces inflation concerns, but the government and the Bank of England need to work together to manage these challenges effectively. 

The conversation also sheds light on India’s position amidst the current global circumstances, particularly considering the challenging situation faced by many advanced economies.  

Singh says there are several positive aspects to India’s current situation. Firstly, in terms of GDP growth rate, India has reclaimed its position as one of the fastest-growing markets globally. This is a significant achievement, showcasing promising growth in various industries and sectors. The government’s initiatives and production-linked incentives, particularly during the pandemic, have played a crucial role in stimulating growth and attracting global companies that were seeking alternative production hubs outside of China. India has garnered attention as a potential destination, leading to discussions and traction for the “Make in India” initiative. This, coupled with efforts to improve the ease of doing business, has facilitated investment inflows into the country. 

To summarise, he says that while India is better positioned compared to the rest of the world, concerns regarding exports persist unless global growth improves or market diversification strategies are implemented. Listen in.  

(Host: Lokeshwarri SK; Producer Jayapriyanka J)

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About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.