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India’s economic growth of 6.8%-7% estimated in 2022-2023 has been a sign of our global reach. he also took the leadership of the G20. But they all agree that the growth will slow down in 2023-2024. However, we are excited, which is good. from 2015-2016? Do not worry, experts say, because incentives related to production will bring ₹40 trillion in other additions. All’s well that ends well, then? Apparently, it’s been a good year for comics as well.
Second, the focus on the economy of $ 5 trillion has gone to $ 10 trillion, as it was before. With so many great things happening around us, the goal has grown and moved away. It doesn’t matter that we’ve been talking about the past since 2018 and we’re still about $3.25 trillion now. After all, this is nominal GDP, not real, so inflation can make it worse. A midsummer dream?
Thirdly, in the electric arc was the rate of inflation in India, which has been the basis of all disputes on economics or policy. We don’t like it when interest rates are raised, even though our savings earn respectable returns. We argue for low prices so that the companies, who have not taken advantage of the low governance that has happened for six years now, will benefit. Like Beckett Waiting for Godot. But that was a show of vanity.
Fourth, one would hear economists use the term ‘base effect’ almost every time it is brought up. This detects which way the number is going, up or down, when the base is running the route. Hard to explain, but the calculations are undeniable. But, really, what is it: Is the GDP of 9.7% in the first half good or bad? Does 5.9% CPI inflation mean it is down, or is it up? As you can’t really say, it comes down to how you want it.
Fifth, the Global Hunger Report, which ranked India so low, sparked outrage and was ignored. We were ranked 101 last year and No. 107 now. It didn’t matter then, but it matters now. We will not be hungry if the world is growing very fast and is about to become a $10 trillion economy. The methodology of this study was classified and found to be flawed. After all, it only referred to children as being crippled and deficient, not adults. That may not be a true report of famine. A lot of action for nothing, really.
On a global scale, it was the same. The first was the sanctions which meant that one could not deal with Russia unless they were buying oil or gas, which Europe continues to do. Double is the buzz word here. Russia was excluded from Swift payments, which allowed countries to trade in domestic currencies. All this has not worked as Russia continues to do what it wants. But the world suffered from inflation which affected every country. Why did we have sanctions in the first place? A joke about mistakes?
Then, global inflation made Jerome Powell a hero. Everything the head of the US Fed said affected all the heads of central banks. The prevailing view that monetary policy is a domestic affair is outdated. Everything the Fed did had to be taken seriously because it affected every country where the money was going. So it was a measure of measure.
Related to the above was the US dollar, which for the first time crossed the same level and showed the strength of the American economy that the Fed wanted to suppress. This meant that all other currencies fell together, reducing opportunities for valuable exports and pushing central banks to use their forex reserves to generate stable income. That’s what happens when the apple cart is upset, a story George Bernard Shaw warned us about long ago.
Fourth, the crypto boom came to an abrupt end, with the FTX fiasco as its last gasp. Since this involved a businessman named Bankman-Fried, the humor was not lost. Crypto has always been difficult and dangerous, because it was unregulated. The greatest return was his trial, and in India, the government and the rulers smelled trouble, although they did not stop it. In theory, cryptocurrency is a Ponzi-like scheme, with no profit. So there was a storm that was starting to fall.
The last was this year’s Nobel Prize, which former Fed chairman Ben Bernanke shared for his contribution to the economy. Helicopter Ben, as he was called, spread economic rain and money during the crisis, as he did with ‘quantitative easing’, which was followed by other central banks. But going back is always difficult, which is left for successors to take over. ‘Increasing’ is the talk, but how does one do it, especially with a country ravaged by covid and headed for recession while the Fed is fighting inflation? Can we get out of this problem? Remember the epic Mahabharata and its famous chakravyuh? Easy to get in, hard to get out. A Nobel Prize should be awarded to whoever can provide the answer. Happy New Year!
This is the opinion of the author
Madan Sabnavis is an economist, Bank of Baroda, and author of ‘Lockdown or Economic Destruction?’
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