The global slowdown – one of the biggest fears of the economy is rising with a dramatic speed. As per the June 2022 edition of the Global Economic Prospects report, global growth is predicted to slow sharply from 5.7 per cent in 2021 to 2.9 per cent this year. India, however, is unstoppable. Given the global slowdown, India has already stepped in with a plan to counter the issue and prevent the Indian economy from being adversely affected.
India’s focus on service exports
The global slowdown has pushed the government to increase its focus on higher services exports. Reportedly, the services exports are expected to grow by around 20% to $300 billion this year. After a 40 per cent increase during the previous financial year, the target for goods exports is likely to be pegged at 10-12%.
However, the commerce department is analysing the first-quarter numbers before announcing the target. It is pertinent to note that there were slight changes in exports witnessed during May when it was increased by over 15%. Since interest rates are escalating in the US and other parts of the world due to high inflation, export demand is likely to slow down. The reason can be attributed to the rabid expansion last year with the value of shipments rising to $418 billion. The ongoing Russia-Ukraine conflict worked as salt to the fire.
Government sources said, “the focus is on stepping up services exports, which remain strong, especially with segments such as travel and tourism doing well in the aftermath of restrictions due to Covid being removed in most parts of the world.”
Read more: MSMEs and Exports-Two drivers of India’s $5 trillion economy
“It also expects the Free Trade Agreements (FTAs) signed with Australia and UAE to aid the exports as the world stares at a slowdown,” the Times of India reported.
Global slowdown
US government’s effort to phase out fossil fuels coupled with Corona-induced inflation is worsening the lives of average Americans. The situation is so bad that the US government pumped in printed money, effectively causing more inflation.
But the situation did not improve and in 2021, the US economy grew at the rate of 5.68 per cent. On the other hand, European Union grew only at the meagre rate of 5.4 per cent. China did show some improvement with a growth rate of 8.08 per cent, but its numbers are always under the shadow of a doubt.
As a result of the slowdown in all three aforementioned places and their trickle-down effects, the economic growth all around the world could only crack the rate of 5.7 per cent.
The crisis doesn’t end here. The global economy is likely to further slow down sharply from 5.7 per cent in 2021 to 2.9 per cent this year. Moreover, growth in emerging markets and developing economies (EMDEs) is also likely to witness a downfall from 6.6 per cent in 2021 to 3.4 per cent in 2022 due to the Russia-Ukraine war and a deteriorating global environment.
India continues to shine
Believe me, when I say this, even 5.7 per cent productivity was not possible if India had not jumped in. India showed an extraordinary growth rate of 8.7 per cent in 2021. It is the highest among the major economies of the world.
Read more: The whole world is witnessing an economic slowdown, but not India – A data driven analysis
India also helped poor countries and provided food and vaccines to a large chunk of the world during the covid.
The future prospects of the Indian economy are also brighter than anyone else. And it has been told by the IMF itself, an organisation which always tries to keep India on tenterhooks.
Earlier as reported by TFI, according to its latest World Economic Output report, India is slated to grow at the rate of 8.2 per cent in 2022 and 6.9 per cent in 2023. On the other hand, the Euro area will grow at the token rates of 2.8 and 2.3 per cent respectively in both financial years. Even an authoritarian regime like China cannot force proper economic output as it is expected to clock only 4.4 and 5.1 per cent growth rate in the upcoming two years.
But why India is leaving the world economy? Well, that is because the first five years of the Modi government were spent setting up a base for the country’s economy so that it can stand firm even in times of crisis. Jan Dhan Accounts and reforms like Insolvency and Bankruptcy Code (IBC) and strictness on loan waiver helped the Modi government to minimise the NPA crisis.
PM Modi knows how to make the Indian economy keep rising even at a time when the world fails to deal with the slowdown. He is leading India to become a developed economy and thus, it becomes necessary to fight such obstacles, which is why the government has now begun focusing on services exports. This makes us believe that India is unstoppable and will soon emerge as a developed economy.
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