India’s GROWTH RATE shocks the World!- For good or bad?
India’s growth rate in the first quarter of this financial year has been astonishing, giving nightmares to several developed countries, registering at 7.8%. Whereas we can see China up at 6.3% in the first quarter, Singapore at 5.17%, and, very surprisingly, even after all the sanctions and bans, Russia is in the 4th spot, increasing at 4.9%, this quarter. A big nation like Germany has fallen into the traps of recession technically as it registers a negative growth rate of 0.2%. Seeing the statistics, Moody’s, an American bond credit rating wing of Moody's Corporation, has changed its previous statement stating that India will grow only 5.5% to 6.7% this year.
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What is the catch here? If we see the graph below, we will find out that a nation’s GDP growth in the first quarter is always high:
If we compare the number 7.8% with others, it seems to be low. But we need to take into consideration the geopolitical situations and the war happening. Also, we should know that the massive growth of 21.6% is a V-shaped recovery of the economy after the lockdowns.
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So, the question is, will India be able to continue this growth rate in the coming quarters?
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It can be well estimated from the fact that India grew at 7.8% at a time when the world is moving towards a recession that India’s economy is fundamentally strong. I want to quote CEA V Anantha Nageswaran, “India set to grow at 6.5% for the rest of the decade”. Now the question comes, is it enough? Is it enough to achieve the 5 trillion mark that which Modi government promised to reach by 2025? To be very honest, it is NOT. We need to grow at a rate of 10% or above to register ourselves as a 5 trillion economy by 2025.
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How can India achieve the double-digit GDP growth mark? This an excellent question to ask ourselves and think about, I will bring an updated article on the problems stopping us from reaching that mark and how we can achieve that mark.
Coming back to the topic, there is bad news to this. RBI had predicted a growth rate of 8% for this quarter which we have achieved to is slightly lower than expected. This has led Moody’s to decrease the prediction of India’s growth rate for the next year to 6.1% from an earlier predicted 6.5%. This is very worrisome. We need to grow at least 6.5% to even touch the 5 trillion GDP mark by 2029, but with this next year, this mark will be further extended.
Summing up both sides of the arguments very logically and rationally, this was my article on India’s growth in the first quarter of 2023, entirely based on facts and figures. I hope you all enjoyed it and stay tuned for more!
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