Global economic prospects have shown a significant deceleration for the year 2023 as 94 economies are expected to grow below the pre-pandemic level of 2019, showed an analysis conducted by industry body PHD Chamber of Commerce and Industry's (PHDCCI) research bureau.
In 2023, among the top 10 leading economies, eight of them including the US, China, Germany, the UK, France, Canada, Italy and Brazil, are expected to perform below their GDP growth rates of pre-pandemic level, it said.
However, India and Japan have shown significant resilience as both economies are growing above the GDP growth level of 2019 during the period of 2021, 2022 and 2023 (projected).
The analysis by PHDCCI was based on the IMF database on the GDP growth of the countries according to their GDP growth rates for 2019, 2020, 2021, and 2022 and the projections for 2023.
The recovery process of many of the economies has been impacted by the post-pandemic geopolitical conflict between Russia and Ukraine, skyrocketed commodity prices, high inflation trajectory and synchronized moves by the central banks in increasing the key interest rates in their respective monetary policy review meeting, said Saket Dalmia, President, PHD Chamber of Commerce and Industry.
India, like others, Dalmia too said is in a bright spot in the global ecosystem with a projected growth rate of 6 to 6.8 per cent in 2023-24.
The World Bank in its latest India Development Update "Navigating the Storm", found that while the deteriorating external environment will weigh on India's growth prospects, the economy is relatively well positioned to weather global spillovers compared to most other emerging markets.
The impact of a tightening global monetary policy cycle, slowing global growth and elevated commodity prices will mean that the Indian economy will experience lower growth in the 2022-23 financial year compared to 2021-22. Despite these challenges, the update expects India to register a strong GDP growth and remain one of the fast-growing major economies in the world, due to robust domestic demand, World Bank said in December 2022.
Coming back to the PHDCCI analysis, it said despite the several shocks, 68 economies such as India, Japan, South Africa, Norway, Mexico, Argentina, Greece, Kuwait, Jordan, UAE, and Saudi Arabia, among others, are growing consistently above the pre-pandemic level of 2019 in the post-pandemic period.
Going ahead, continued economic reforms in India would further strengthen the economic fundamentals of the country to maintain a steady economic growth trajectory, said PHDCCI's Dalmia, adding that strengthening India's connectivity with Global Value Chains (GVCs) will help to improve supply-side bottlenecks and reduce costs of doing business.
However, he also insisted industry needs a great hand-holding in such a difficult environment caused by global economic uncertainties and volatile inflationary conditions.
"We need to focus more on the manufacturing sector as the high cost of borrowings, and high prices of raw materials have impacted the price-cost margins of the producers. Reduced cost of doing business such as easier compliances and a robust Single Window System will enhance ease of doing business in the country," added Dalmia. (ANI)