India to become fastest growing economy

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International Business News  –  According to a July 17 report on the website of the Spanish newspaper The Economist, India’s central bank recently said that India has not only managed to avoid the prolonged inflation and ensuing economic crisis that has plagued many countries, but is becoming the world’s fastest growing economy. However, it did not say when this would happen.

A statement issued by the Reserve Bank of India said that while geopolitical tensions and their impact on many sectors will inevitably drag down India’s economic recovery, the rejuvenation of the economy and the arrival of the planting season will help boost rural demand, thereby offsetting the shortfall in urban spending, which will ultimately consolidate the recovery.

Talking about the fact that India’s inflation rate has crossed 7%, the RBI believes that the worst may be over. However, to consolidate this, the momentum of falling raw material prices in recent weeks needs to continue for some time, as well as supply chain pressures to be eased.

As for high crude oil prices and their impact on India’s current account deficit, the RBI estimates that with oil prices averaging $105 per barrel, India’s current account deficit will widen to 2.3% of GDP this year and next. If oil prices exceed $120, this ratio will rise by 0.5 percentage points. The agency stressed that in any case, the deficit ratio will remain “within a sustainable range of 3 percent.

The report noted that this is not the only top spot that India is about to take. According to the United Nations, India will replace China as the world’s most populous country by 2023.