AGAINST THE TREND

Despite headwinds, India continues to be one of the better-performing economies in the world

The Indian economy is resilient, its fundamentals robust. This is what has enabled the Indian economy to chug along in the last two years without having to confront severe shocks in sharp contrast to several other countries, some of whom have either become basket cases or are on the verge of collapse.

The covid 19 pandemic and all its associated problems have undeniably contributed to the present global economic malaise.

However, there are other reasons as well, prime among them being the unexpected external developments beyond the control of national governments (including India’s).

The war between Russia and Ukraine in Europe is one such while Chinese belligerence in the Far East (Pacific) is another. The third hotspot is Iran, which has been sanctioned by the United States (US) and its allies and the increasing animosity between the two. These three developments plus the pandemic-caused problems have all combined to exacerbate the global economy’s woes.

Global supply routes have been disrupted because of political tensions; commodity prices have consequently spiked and oil prices have moved northwards. All this has spurred inflation and negatively impacted the global economy.

At the time of writing, Saudi Arabia and the US have locked horns over

the OPEC+ decision to cut oil production - a move that can have a deleterious impact on the already moribund global economy.

India has fared relatively well in the last two years because of the inherent strengths of its economy and a nimble and proactive central government headed by Prime Minister Narendra Modi. However, this being a highly interconnected and globalized world, India too (like several others) has been unable to escape economic slowdown.