The International Monetary Fund (IMF), the World Bank, and Credit Suisse have praised India for its robust economic performance during the global economic downturn caused by the Covid-19 pandemic.
These top three financial anchors have noted India’s strong macroeconomic fundamentals and well-controlled inflation as reasons for its resilience.
“When other big economies are heading towards deeper recession, India appears partially immune to its adverse impacts because of its strong macroeconomic stability and well-controlled inflation.”
IMF, World Bank & Credit Suisse
IMF Managing Director, Kristalina Georgieva expressed confidence in India’s ability to lead the G-20 group of major economies and praised India’s successful implementation of digitization in government and private sectors.
“At present the whole world is facing many kinds of crises along with economic slowdown. In such a situation, we have great faith in India as the chairman of the G-20, a group of twenty major economies of the world.
“India is among the countries performing better than the global average. This is a critical time for the world to safeguard an integrated global economy.”
Kristalina Georgieva
Ms. Georgieva also applauded India’s successful implementation of digitization in both government and private sectors.
“The whole world is seeing that India has very well implemented digitization in the country in government and private sector. Promoting digitization in the public sector is also one of the G20’s priorities.”
Ms. Georgieva
The Managing Director of IMF went on to highlight that connecting everyone to digitization can improve sources of development and employment.
“The sources of development and employment can be strengthened by connecting everyone with digitization. India definitely influences development.”
Ms. Georgieva
Kristalina hopes that India would do global service in a big way, also keeping the whole world together.
According to the IMF, India’s real GDP is expected to grow at 6.8% in the current fiscal year and may decrease to 6.1% in 2023-2024.
Likewise, the World Bank also predicted a growth of 6.9% for FY23 with a potential slowdown to 6.6% in the following year.
The Indian Government’s Ministry of Statistics, however, estimated a growth of 7% in the current fiscal year, which appear to be lower than the government’s earlier projection of 8%-8.5% growth.
Meanwhile, India’s two neighboring countries Sri Lanka and Pakistan are battling with instability. China has also slowed down dramatically. The effects of these conditions are visible across Asia.
Economic Crisis In Sri Lanka
Sri Lanka is experiencing its worst economic recession since independence. It is most likely the most difficult period for the island country since the climatic end of its civil war in 2009.
The country’s inflation rate rose to 15.1% in 2022, rate of food inflation also to 25.7 percent with a 400-gram pack of milk, for example, increasing to $0.90 in less than a weekend.
The country’s second-largest gas supplier has increased the cost of the gas cylinders by 1359 Sri Lankan Rupees.
Even more, the country owes a significant amount of money to China, India, and Japan; owing China an amount worth US$5 billion, which many opponents claim was the starting point of the crisis.
Economic Crisis at Pakistan
The government in Pakistan recently ordered the shutdown of malls and markets as well as measures to conserve energy as the country grapples with a crippling power and economic crisis.
Apparently, the country finds itself cash strapped as money expected to come in under an International Monetary Fund (IMF) programme has been delayed.
The foreign exchange reserves of Pakistan now barely cover a month of imports, most of which are for energy purchases.
Pakistan’s total liquid foreign exchange reserves stood at $11.7bn fall of December 2022, $5.8bn of which are with the central bank. This constitutes half the value of the foreign exchange reserves it held at the start of 2022.
The country is still recovering from floods that swept the nation in 2022 and has been ranked the 8th most vulnerable country to suffer extreme weather conditions, caused by climate change.
