IMF’s World Economic Outlook has flagged concerns about a global recession. This should worry US & advanced economies but probability of recession in India seems low.
India’s macroeconomic fundamentals continue to remain strong. Going forward, the recent moderation in the international commodity prices should slow down the slump.
Food prices, reopening of economy & resurgent demand are fuelling inflation, but robust public distribution system is likely helping some states like Kerala, Tamil Nadu keep prices down.
RBI hopes to boost forex inflows and stem rupee slump. But rupee likely to remain under pressure amid tighter global financial conditions & interest rate hikes by US Fed.
Power sector reforms, preventing leakages in subsidies payments and avoiding fiscally unwise decisions like reversion to old pension system can help improve their financial health.
The government will have to do a balancing act, maintaining growth and macroeconomic stability by keeping fiscal and current account deficits within manageable limits.
Aggressive rate hikes will dampen demand & cause economic slowdown. In this uncertain scenario, India should avoid knee jerk policy responses & strengthen its macro-fundamentals.
Despite elevated inflation, many indicators suggest growth has remained resilient. The PMI points to sustained recovery in manufacturing sector, and GDP collections are still robust.
The measures have been imposed to insulate the domestic market from higher international prices. But they could reduce incentives for producers to expand production in the long run.
Three years into the war, Europe’s sanctions regime now resembles a policy of managed hypocrisy: Moral rhetoric for public consumption, exemptions for industrial preservation.
While global corporations setting up GCCs in India continue to express confidence in availability of skilled AI engineers, the panel argued that India’s real challenge lies elsewhere.
Without a Congress revival, there can be no challenge to the BJP pan-nationally. Modi’s party is growing, and almost entirely at the cost of the Congress.
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