Dead Or Roaring? Donald Trump Calls India A Dead Economy—But Moody’s Warns US May Hit Recession First

The global economic narrative took a sharp political turn this week after US President Donald Trump dismissed India as a “dead economy,” just hours after announcing sweeping 25% tariffs on Indian goods.

The remarks, aimed at both India and Russia, sparked a political firestorm in New Delhi and raised questions about America’s own economic resilience.

India Posts Strong Growth Amid Tariff Storm

According to official data, India’s economy grew by 7.8% in April–June, the highest in five quarters, driven largely by a strong farm sector.

The robust showing reinforced India’s position as the world’s fastest-growing major economy, outpacing China’s 5.2% GDP growth during the same period.

An EY report added long-term optimism, projecting India’s economy to reach $20.7 trillion (PPP) by 2030 and emerge as the world’s second-largest economy by 2038, with a GDP of $34.2 trillion.

The report also suggested that with effective countermeasures, India could cushion the impact of higher US tariffs to just 0.1 percentage point of GDP growth.

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Trump’s “Dead Economy” Remark Sparks Firestorm

Despite these numbers, Trump escalated his rhetoric by targeting India and Russia over trade ties. “They can take their dead economies down together,” he said, linking the criticism to India’s imports of Russian crude and military equipment.

The comments drew sharp criticism across India, with political leaders calling it an “unfounded attack” that ignores India’s recent growth momentum.

US Economy “On the Brink” of Recession

Ironically, Trump’s remarks come at a time when America’s own economy is flashing warning signs. Mark Zandi, chief economist at Moody’s Analytics and one of the first to forecast the 2008 financial crisis, told Newsweek that the US is “on the precipice of recession” and could contract by the end of 2025.

Zandi pointed to stagnant job growth, rising inflation, and the impact of tariffs as major risks. Job creation has slowed to a “virtual standstill,” while inflation, currently at 2.7%, could climb to nearly 4% within a year.

If layoffs rise alongside higher prices, he warned, the US could fall into a self-reinforcing cycle of weaker demand and job cuts.

According to Zandi, states like California and New York, which together account for over 20% of US GDP, will determine whether the national economy tips into recession.