Business
CEA Nageswaran Advises 'Margins Of Safety' Amid Rising Global Uncertainty, Says IMF's Global Growth Estimates Outdated
Swarajya Staff
Mar 17, 2023, 08:48 AM | Updated 08:48 AM IST
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
V Anantha Nageswaran, the chief economic advisor (CEA) to government of Inida, on Thursday (16 March) highlighted the increasing global uncertainty due to the banking crisis in the US.
He advised governments, businesses, and individuals to maintain "margins of safety" in their operations, including fiscal planning, corporate planning, household balance sheets, and savings accounts.
Speaking at an event organised by ratings agency Crisil, he stated that the global growth estimates provided by the International Monetary Fund (IMF) in January are now outdated.
The IMF had projected the global economy to grow at 2.9 per cent in 2023 and 3.1 per cent in 2024, reports Business Standard.
Nageswaran also expressed concern about the impact of recent developments in the US on investor confidence and bank lending growth.
He suggested that emerging economies would likely benefit from the situation, as pressure on their currencies would ease. However, he cautioned that if the Federal Reserve proceeded with its tightening programme, there might be a domino effect on other banking institutions and the overall economy.
He acknowledged that this would be a challenging situation for the central banks of developed economies to deal with.
Nageswaran acknowledged that it would be challenging to determine the net effect of these developments on countries like India.
He noted that India's GDP growth was expected to be 7 per cent in the current fiscal year.
He added that if temperatures remained in the current range for another week, the wheat harvest would likely occur, leading to positive chain reactions for inflation, agricultural output, and monetary policy.
However, he cautioned that the baseline growth projection of 6.5 per cent in the Economic Survey for FY24 had more downside risk than upside risk. He believed that one should not be overly optimistic about achieving 8-9 per cent GDP growth in the current environment.
He suggested that sustaining growth of 6.5-7 per cent in the next 7-8 years until the next decade would be a significant achievement.
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.