Rider in the storm: Tracing India's growth in a volatile world
Summary
The world is staring at a slowdown in 2023. The jury is out on whether the US would tip into a recession or not, while Europe is expected to largely flatline.
For India, high interest rates, falling but still-elevated inflation, and geopolitical uncertainties remain the key risks for next fiscal, and these will test the resilience of domestic demand.
Although India has emerged as the fastest-growing large economy with healthy medium-term prospects, it is not decoupled from adverse developments around the world.
That said, continued government focus on capex, healthy corporate balance sheets, well-capitalised banks, improving capacity utilisation, and impetus for investments from sharper focus on climate risks are in play.
Diversification of supply chains, reducing imports and exploring exporting potential with Performance Linked Incentive schemes for emerging manufacturing segments will also boost investments and growth.
The questions that arise in the milieu are:
What will it take for India to remain the fastest-growing major economy next fiscal and over the medium term?
What are the short- and medium-term risks the country faces?
What will be the role of private sector investments in driving growth next fiscal and thereafter?
Can double-digit revenue growth continue for India Inc, especially with commodity prices moderating?
How will government spending pan out in a pre-election year?
How will the global slowdown spill over to India?
What are the opportunities and challenges for India as the world sharpens focus on climate risk?
For answers, CRISIL is organising its flagship India Outlook Seminar on March 16, 2023.
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