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Updated April 14th, 2023 at 13:02 IST

India's economic bull run: Strong and fast in the face of global recession

As the Global Recession takes grip, India is likely to remain insulated from the meltdown.

Reported by: Sharmila Bhowmick
Globe
Image Credit: Shutterstock | Image:self
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As the Global Recession takes grip, India is likely to remain insulated from the meltdown. The recessionary pressure on the global markets has been primarily because of  the Russia-Ukraine war and more recently, the US-Banking crisis. while the Fed has been increasing rates to keep the inflation rates in check, the onset of recession in the markets worldwide, by now has been deemed inevitable. 

A pause on rate hikes

In the latest meeting of Reserve Bank of India's Monetary Policy Committee (MPC) the bank rates have been restrained from further hikes as Governor Shaktikanta Das decided to take  a wait and watch approach though he underlined the move as a 'pause not pivot'.

The Bloomberg Recession Meter

The Bloomberg Recession Meter has shown how India is likely to stay strong in the face of a global economic volatility and has a 0% possibility of a recession. The highest risk at this time, the Recession meter shows is currently in the UK which is at a 75% threat followed by New Zealand at 70%, US 65%, Germany 60%, Italy 60%, canada 60%, France 50%, South Africa 45%, Australia 40%, Russia 37.5%, Japan 35%, south Korea 31%, mexico 27.5%, Spain 25%, Switzereland 20%, Brazil 15%, China 12.5%, Saudi Arabia 5% and Indonesia 2%.

Global Recession: Long time coming

The onset of the Global recession in 2023 has been  predicted by multiple economic agencies like the the Centre for Economics and Business Research (CEBR). According to IMF's conservative assessment, the global GDP is likely to expand at less than 2% in FY24 indicating an onset of an economic recession with most economies at the risk of a collapse. 

India's robust growth

While India has been keeping a strong grip on its inflation, it is yet to reach its desired 4% mark but the inflation data is on the mend. the job market too has shown significant buoyancy overall, despite the massive tech layoffs by the global tech-giants oiver in recent months.

GDP growth

India's growth can be gauge from its strong and steady GDP growth which is the Reserve Bank of India's Monetary Policy Committee has now projected at 6.5% for FY24. the International Monetary Fund (IMF) however has shared a more conservative estimate of around 5.9% GDP growth for FY24 for India. Earlier Bloomberg data has also shown how India as part of East Asia will be part of a major surge in Global GDP by 2037 while Europe's share is likely to shrink.

How long will the wave last?

According to market pundits, the growth wave is mostly attributed to India's insulation from the global markets. The FIIs too have been recently displaying a steady trend of buying in. The economic bull-run may have just begun.


 

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Published April 14th, 2023 at 12:58 IST

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