Slowing Indian economic recovery due to geopolitical risks
Team Ambitiousbaba are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is “Slowing Indian economic recovery due to geopolitical risks”
The pace of Indian economy is losing its momentum more surprisingly than previously estimation after the latest wave of corona virus cases earlier this year strangled activity and as risks rise from higher prices of commodities amid Russia’s invasion of Ukraine.
The gross domestic product might be expanded 9.1% in the year to March 31, the quickest pace among major economies, according to the Bloomberg survey ahead of official data to be published. The lower economic expansion of 9.2% has been seen in both the previous survey and official statistics ministry estimates last month.
Loss of growth momentum:
The loss of momentum occurs amid disruptions from waves of virus outbreaks and lingering external risks, most notably from high commodity prices that are being worsened by the Russia-Ukraine crisis.
A slower pace of expansion could distress investment and job creation, testing fiscal and monetary policies that have remained loose despite rising inflation pressures.
As India is Asia’s third-biggest economy, which is facing a trail in manufacturing output and impact of omicron variant in contact-intensive sectors while Geopolitics remains a risk.
Higher oil prices can exacerbate the outlook for inflation and affect disposable incomes in a nation where private consumption accounts for some 60% of GDP. It can also broaden the current-account gap and be a tangle on the rupee, which last week was the second-worst performer among 11 Asian currencies.
The estimation on quarterly GDP data is to show growth slowing to 5.9% in the final three months of 2021, from an 8.4% expansion in the preceding quarter. This situation was happened before the omicron variant of the corona virus began scattering earlier this year, forcing many Indian states to impose curbs.
Prime Minister Narendra Modi’s government last week drooped that the pandemic recovery will be challenged by geopolitical risks.
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