Global economic developments, in the new year, are expected to further complicate the economic outlook and therefore, continued vigilance is a critical aspect in maintaining India’s external resilience, as per the Finance Ministry’s monthly economic review for November 2022, released on Friday.
“No country can afford to sit on its laurels, India included. Continued commitment to macroeconomic stability will underpin both economic performance and investor interest in India. The latter is very high, currently. It needs to be nurtured.
“Going forward, India needs to focus on medium-term challenges such as securing technology and resources for energy transition and skilling its youth for the 21st-century economy while staying the course on fiscal consolidation at the general government level. The good news is that much hard work has been done in the last several years and a strong platform has been erected on which the superstructure of a middle-income economy can be constructed,” it noted.
It further underlined that “Indian external sector continues to face the headwinds emanating from the global slowdown. However, the downside to a widening current account deficit is expected to be limited by a robust services export performance through the rest of the year and by inward remittances, which are expected to touch $100 billion this fiscal year as per the World Bank.
“Stable foreign direct investment (FDI) flows, resurgent FPI flows, and foreign exchange holdings that provide an import cover of nine months cushion the external front. Altogether, India’s strong economic performance is also asserted by the World Bank’s recent upgradation of India’s growth forecast from 6.5 per cent to 6.9 per cent for 2022-23.”
At the same time, the review said that India’s commencement of its G20 presidency on December 1, marks a significant step towards undertaking a leadership role on the global stage as the global economy sails through the storm of a unique set of economic challenges.
“India inherits the responsibility of steering collective action for restoring global economic and financial stability in the aftermath of the pandemic and the Russia-Ukraine conflict. India has identified several priorities for its G20 presidency – inclusive, equitable and sustainable growth; LiFE (lifestyle for environment), women’s empowerment, digital public infrastructure and tech-enabled development in health, agriculture, education, commerce, skill-mapping, and culture and tourism; climate financing; circular economy; global food security; energy security; green hydrogen; disaster risk reduction and resilience; developmental cooperation; fight against economic crimes; and multilateral reforms,” it added.