The current economic outlook is uncertain in the wake of financial sector turmoil, high inflation rate, Russia–Ukraine war and three years of deadly pandemic. Advanced countries’ economies are expected to see a downturn in the current fiscal – showing further financial sector stress and decline in global growth.
Stubbornly high inflation and recent financial sector turmoil, rising interest rates across the world, tight labor markets in a number of economies, persistently higher government debt and deficit, pose the risks to the world economy. The Supply-chain disruptions and rising geopolitical tensions is the eye of the storm and has brought the issue to the center of debate.
The world appears to be on the verge of yet another debt crisis. Some countries have been borrowing excessively and have unsustainable debt. An estimated 56 countries are in debt distress or at risk of it.
Recession probabilities worldwide in 2023, indicate that the UK has a 75% chance of going into recession, the US and Germany have 65% chance but India has 0% chance of going into a recession. Rather, for the next 24 months around 30% of the world’s growth is going to come from India.
Amid the gloomy situations, India remains the shining star and looks immune to the turmoil. In-fact there are a couple of tangible reasons which lead us to this conclusion. India is an internal consuming economy, a lot of production happens in house, our recent exports have crossed $77 billion which makes us in the top five exporters in the world. The outlook prediction is that by 2030 our goods will be worth $1.5 trillion and services will be $500 billion, that will give us USD 2 trillion.
This growth will come through a number of projects started by the government of India. Bharat Mala, Sagar Mala and rupee trade is going to have a better impact. Ghati Shakti will bring down our logistics cost by 7 to 8% which is a big number at a global stage.
Today we have agreements with 19 countries for the rupee trade. If we look at the world stage – Dollar, Euro, Pound and fourth circulated currency or accepted currency as we talk today is Rupee. Rupee has already reached the number four stage.
On reaching around 40 to 50 countries, which is a matter of time, it will enter the IMF’s basket, and will become an international currency. 40 to 50 countries, having rupee with them will buy goods or services from India. India will probably be a member of the Special Drawing Rights, SDR, essentially a basket of currency.
Pursuing ‘Make in India’ and ‘Atmanirbhar Bharat’, India is becoming the factory of the world in terms of goods and services produced. For example, in defense 60% of the goods are made in India. Industrial production is up. As availability of the capital is concerned, we have the third highest foreign exchange reserves in the world and the inflation is quite under control. More than 800 million youth and demographic dividend is going to remain for the next 70 years. Our purchasing power is increasing, more people are joining the internet and buying internet enabled smartphones.
On the debt front India is pretty comfortable with $2.28 trillion and external debt is only $600 billion as against $34.1 trillion for the US and $53 trillion debt for China. China debt is approximately more than 50% of the global GDP. India is number one FDI destination in the world. We are the third biggest startup ecosystem in the world with 100 unicorns already.
The whole world is looking at India and seeing a real opportunity. If we look around the world, India is a shining star. Everybody would want to invest and grow here. It’s a vibrant market.
