June 24: India exhibits the strongest robustness amidst the testing times of COVID-19 and geopolitical distress.
In the International Economic Resilience, the Indian Economy improved from 6th position in 2019 to 4th position in 2020, 3rd in 2021, and 2nd in 2022 among the top ten leading economies, said the Industry body PHDCCI.
Despite the massive disruptions in both demand and supply-side factors caused by the COVID-19 pandemic and further geopolitical distress, India, through its effective dynamic policy environment, is the only economy among the top ten leading economies which has shown consistent improvement in its macroeconomic performance during the last four years despite global economic crisis of COVID-19 and recent geopolitical developments, said Pradeep Multani, President, PHD Chamber of Commerce and Industry in a press statement issued here today.
The conjuncture of COVID-19 led to an economic crisis and the intensifying geopolitical distress has exposed the world economy to a diverse range of domestic and external vulnerabilities.
At this juncture, the rank analysis of International Economic Resilience (IER), based on the 5 lead macroeconomic indicators, for each of the years 2019, 2020, 2021, and 2022 suggests that India’s macroeconomic endurance has consistently improved over the last few years as compared to the other leading economies in the world, and India is projected to improve to the IER rank of 2nd for the year 2022, says an analysis conducted by the industry body PHD Chamber of Commerce and Industry.
The report released by PHDCCI, titled ‘Pre and Post COVID Economic Dynamics of Leading Economies’, (attached) is based on the comparative analysis of the leading economies’ resilience conducted based on the five leading economic parameters viz., Real GDP Growth Rate parameter, Merchandise Export Volume Growth rate, Current Account Balance (% of GDP), General government net lending/borrowing (% of GDP), and Gross Debt to GDP ratio
India’s greater and stronger supply-side interventions helped to improve its factors’ mobility. The pace of economic activity remains strong due to the structural reforms undertaken by the Government during the last 2 years, said the report released by PHDCCI.
Going ahead, extracting the innate robustness of its underlying fundamentals and supported by a pragmatic and encouraging policy mix, the Indian economy is projected to continue to grow at the fastest rate as compared to other leading economies in the world.
As per the IMF estimates of April 2022 WEO, India’s real GDP growth rate and merchandise export growth rate for 2022 are projected to be the strongest at 8.2% and 7.0% respectively, Pradeep Multani said.
At this juncture, further expansion of trade and industry would be imperative to sustain the growing economic momentum.
Further encouragement to MSMEs, agricultural, and manufacturing sectors to make Indian supply chains more diverse will go a long way in realizing India’s economic recovery, further strengthening its economic resilience, and thus allowing for its even faster adaptation to such unprecedented times, added Pradeep Multani.
Going forward, there is a greater need for the Indian economy to focus more on long-term growth prospects which would help leverage the ever-evolving geostrategic opportunities, he said.
It is suggested that India calibrate its economic policies in such a way that helps to take advantage of its external economic environment to foster an even stronger internal transformation.
Further, even a more pronounced thrust on prioritising innovation would be a vital ingredient to unlock post COVID economic growth, said Pradeep Multani.
Therefore, further improvement in ease of doing business would help uplift business confidence and pull a larger number of both domestic and foreign investments to the Indian economy, said Pradeep Multani.
The post-COVID new normal is absolutely distinctive from the pre-COVID times. The concerted efforts of the central Government and the state Governments, through harmonization of both monetary and fiscal policy measures, would help address the challenges posed by rising inflationary pressures, thus allowing the Indian economy to further nurture its resilience and hence come out of the compounded effects of pandemic induced structural constraints, said Pradeep Multani.
