For those who are in the habit of predicting the whole day by looking at the morning, 2022 has surprised them.
The year began with assurances of overcoming the pandemic nightmare.
Global economic growth stood at 5.8 percent in 2021, with international trade touching new highs.
It seemed that the global economy could enter a new phase of growth in 2022.
At the end of the year, it is natural to feel that assurance is illusory. The price hike started early in the year.
To deal with it the US Federal Reserve abandoned several years of loose monetary policy and raised interest rates, followed by the rest of the world.
As a result, investment capital flocked to the US, the dollar rose against other currencies, which hit the trade market.
On the other hand, the Russo-Ukraine war started. These two countries are one of the largest exporters of many food commodities such as wheat, maize, sunflower seeds—so, The market was damaged by the war.
Petroleum and commodity markets have also been hit by escalating economic sanctions against Russia.
Inflation intensified. This volatility in the food market has created the biggest food insecurity in the last half century.
And, the covid epidemic has returned with great speed in China. For now, the epidemic is under control elsewhere, but with air travel now normal, the risk of another epidemic becoming global is high.
The overall picture of the global financial system is so bleak, so alarming, that all forecasts for financial growth are on the downside.
Experts virtually agree that the entire world is on the brink of a massive financial meltdown. In addition, this year has shown that, however acute the threat of global warming, however looming, politics is not yet ready to deal with it collectively.
As a result, 2023 is coming with the darkness of uncertainty. But since air travel is now normal, the risk of another pandemic becoming global is looming.
There are already some glimpses of where the year will take India.
In the last eight to ten years, India has lost the strength of its domestic economy to handle the shock when the global financial system is in turmoil.
On top of that, as evident from recent figures, India’s exports have lost momentum, but import costs are rising.
On the other hand, the employment rate in the country is down. GDP figures show that the growth in spending on consumption expenditure is alarming.
That is, at the moment, India’s ability to handle the shock of the international market is limited. But, even then, the question is, how much can the growth rate decrease?
According to a section of experts, the growth rate of the Indian economy may fall below five percent in 2023.
However, whether India will still have the fastest developing economy, It depends on the growth rate of some other countries – especially Indonesia. The news from the developed world is worse.
The crisis in America, Europe and China, which controls 60 percent of the world economy, is intense.
With Europe already in recession, the financial situation in Germany and England is causing further concern. Market estimates that America will also fall into recession in the first half of 2023.
China’s situation will largely depend on whether or not it is able to handle a new wave of the Covid epidemic. All in all, there is a dark cloud of worry in the sky of 2023.
There was an increased concern about the competence of those charged with managing India’s financial system.