Will global recession impact India or not?
Current slowdown may not impact India much
The global economy, made up of international trade, finance and cross-border investments weaves all countries, their economies, cultures and societies into a network where the direct and indirect linkages are as invisible as they are complex. Consequently, it is an impossibility in today's globalised world for events in one country or another region to not impact others. The war between Ukraine and Russia – an ostensibly localised event in Europe has impacted fuel and food prices, supply chains and connectivity, inflation and economic stagnation across the world.
To assume that the global recession will not impact the Indian economy is not based on logic.
That said, the extent of the impact experienced by India may be less than other economies of scale across the world. Much as we as an economy are intertwined with the world at large, we are relatively protected since a large proportion of our GDP is on account of internal demand and driven by the domestic market. One is hopeful that as inflation levels peak across the world, interest rates will soften and investments will come flocking back to the world's fastest growing large economy. The continued spate of tech-related layoffs does dominate news cycles and affects sentiments. Pessimism and negativity have a consequential impact on consumption, which as we know is essential for growth and progress.
That a recession, now more a question of when and not if, will affect the Indian economy is a given – that it will not be debilitating is the cautious optimism that should drive us forward.
- Mohit Nirula, CEO, Columbia Pacific Communities