Raghuram Rajan, a former RBI governor, stated on Tuesday that it is premature to assume that India will displace China as a factor in driving global economic growth.
However, given that India already has the fifth-largest economy in the world, is expanding, and has the capacity to continue doing so, the scenario may alter in the future.
Mr. Raghuram Rajan stated that any recovery in the Chinese economy would unquestionably improve the prospects for global growth during a press briefing at the World Economic Forum (WEF) on the recently released Chief Economists Outlook, which showed that the majority of them predicted a global recession in 2023.
He claimed that at this moment, officials are considering both the housing and labor markets.
He noted that although there are fewer property sales in the US, prices are not going down.
“Is everything going to be bad? Not likely… There would undoubtedly be benefits if Mr. Putin decided to stop the conflict “Rajan made a note.
There are still 12 months left, he remarked, and things might turn out well if China improves.
“China is recovering from the pandemic, and this year will likely see a recovery beginning in March or April. Some of that would go toward household services, which might not have any bearing on the outside world. However, any increase in production could have some effects by lowering external prices “added he.
When asked about India, Mr. Rajan responded, “The argument that India will replace China is quite premature as India’s GDP is considerably smaller as of now.”
However, he continued, “that may alter over time given that India now has the fifth-largest economy and can continue to grow.