"Indian Economy Doing Incredibly Well" says World Economic Forum Chief | Vantage with Palki Sharma
Summary
TLDRIn an interview, World Economic Forum President Borge Bren discusses India's remarkable economic growth amidst global conflicts and recession fears. He highlights India's potential to become the world's third-largest economy by 2027, driven by policy reforms, infrastructure development, and a digitally literate young population. Bren also addresses global concerns over rising debt levels, emphasizing the need for strategic investment to maintain growth and competitiveness.
Takeaways
- 🌟 India is recognized as the world's fastest-growing economy and is projected to become the third-largest economy by 2027 despite global challenges.
- 🔍 The IMF predicts a global economic growth of over 3%, avoiding a feared recession, but there are concerns about geopolitical issues affecting trade and growth.
- 📈 India's economy is performing remarkably well, even though it is influenced by global conditions, with a trend growth of around 4% historically.
- 💹 India is on track to become a $10 trillion economy in the coming decade, which would make it the third-largest economy globally.
- 🚀 India's growth has led to significant poverty reduction, lifting 400 million people out of extreme poverty, a feat previously seen only in China.
- 🏗️ India's rapid infrastructure development, including new airports, trains, and roads, is a key factor in its economic growth.
- 💼 The Indian economy is becoming more open to foreign direct investment and providing a level playing field, which is attracting more businesses.
- 🔗 India is benefiting from the diversification of global value chains and 'friend-shoring', especially with increased manufacturing from countries like the US.
- 📱 The growth in India's services and digital economy is outpacing traditional manufacturing, with a digitally literate young population being an asset.
- 🆔 India's digital ID system has been crucial in facilitating economic transactions and increasing efficiency.
- 💡 Policy recommendations for India include investing the revenues from 8% growth into areas that will enhance its future competitiveness.
- 📉 There are concerns about rising debt levels, especially in developing countries, which could pose risks to the global economy if not managed properly.
Q & A
What is the current global economic outlook according to the IMF?
-The IMF predicts that the global economy will grow more than 3%, despite the presence of two major wars and multiple conflicts.
How does India's economic growth compare to the global trend?
-India is the world's fastest-growing economy and is expected to become the third-largest economy by 2027, defying global economic slowdowns.
What impact have conflicts such as in Ukraine and Gaza had on the global economy?
-The conflicts have not yet escalated to a level that would severely impact trade and growth, but there is a concern that they could lead to a 'geopolitical recession'.
What is the role of India's economic reforms in its growth trajectory?
-India's economic reforms have been crucial, with infrastructure development, opening up to foreign direct investment, and diversification of value chains playing significant roles.
How has India managed to lift millions out of poverty?
-India's growth has led to the eradication of poverty at an impressive scale, lifting over 400 million people out of extreme poverty.
What is the significance of India being a democracy in achieving its economic growth?
-Achieving such economic growth within a democratic framework is notable due to the complexities and challenges that democracies face.
What is the 'X Factor' that has allowed India to defy global economic trends?
-The 'X Factor' includes policy decisions, infrastructure development, opening up to foreign investment, and a focus on services and digital economy.
How has the diversification of value chains benefited India?
-India has benefited from the diversification of value chains as countries look to reduce their reliance on single manufacturing sources.
What is the current state of foreign direct investment in India?
-India is becoming more open to foreign direct investment, which is contributing to its economic growth.
What is the role of India's digital economy in its growth?
-The digital economy is growing stronger than traditional manufacturing, and India's digitally literate young population is a significant advantage.
What risks does the rising global debt pose to the developing world?
-Rising debt levels, especially in developing countries, pose a risk as high interest rates due to inflationary pressure can lead to debt servicing becoming the largest budget cost.
What is Borge Bren's recommendation for India's economic policy moving forward?
-Bren suggests that India should continue its reforms and invest revenues from growth into areas that increase its future competitiveness.
Outlines
🌍 India's Economic Resilience Amidst Global Challenges
The first paragraph discusses India's remarkable economic growth despite global conflicts and economic downturns. India is highlighted as the world's fastest-growing economy, with the IMF predicting it could become the third-largest economy by 2027. The conversation with Borge Bren, the president of the World Economic Forum, delves into how India has managed to defy global trends. Bren attributes India's success to its economic reforms, infrastructure development, and opening up to foreign direct investments. He also notes India's impressive progress in lifting people out of poverty and its potential to become a $10 trillion economy in the coming decade. Bren emphasizes the importance of India's digital economy and its digitally literate young population as key factors in its growth.
📈 Policy Prescriptions and Global Debt Concerns
The second paragraph focuses on policy recommendations for India and the risks posed by rising global debt levels. Bren suggests that India should continue its current policies, ensuring that revenues from economic growth are invested in areas that enhance future competitiveness. He also addresses concerns raised by global agencies like the IMF and the World Bank about unsustainable debt levels, particularly in developing countries. Bren points out the challenge of managing debt taken on at zero interest rates in a context of high inflation and interest rates, which now constitute a significant budget cost. He argues that funds should ideally be invested in education, health, and infrastructure rather than servicing debt.
Mindmap
Keywords
💡Global Economic Gloom
💡IMF
💡Geopolitical Recession
💡Reforms
💡Foreign Direct Investment (FDI)
💡Digital Economy
💡Digital Literacy
💡Debt
💡Austerity
💡Infrastructure
💡Value Chains
Highlights
India is the world's fastest-growing economy.
IMF predicts India could become the third-largest economy by 2027.
India's economic growth is notable despite global conflicts and economic downturns.
Borge Brende, president of the World Economic Forum, discusses global economic outlook.
Global economy expected to grow more than 3% despite fears of recession.
There's a global geopolitical recession but conflicts like Ukraine and Gaza have not severely impacted trade and growth.
India's economy is performing incredibly well, even relying on global situations.
India's trend growth was close to 4%, now a little over 3%.
Continued reforms could make India a 10 trillion USD economy in the coming decade.
India's growth has helped lift 400 million people out of extreme poverty.
India's economic success is significant as a democracy.
Infrastructure in India is rapidly changing with new airports, trains, and roads.
India's economy is opening up to foreign direct investments.
India benefits from diversification of value chains and 'friend-shoring'.
25% of Apple iPhones are now produced in India.
India's services and digital economy are growing stronger.
India has a digitally literate young population.
Digital ID in India is important for broader economic context.
Policy prescription for New Delhi is to continue current strategies and invest in competitiveness.
Global agencies like IMF and World Bank are concerned about rising debt levels.
Unsustainable debt poses a risk to the global economy due to high interest rates.
Debt was taken on at zero interest rates, now interest rates are at 4%.
Interest rates have become the largest budget cost in many developing countries.
Transcripts
meanwhile globally the focus is on
India's economic policies India's the
world's fastest growing economy the IMF
says it could become the third largest
economy by 2027 and this is despite two
Wars multiple conflicts and global
economic gloom and doom so the question
is how has India managed to remain the
bright spot how is it defying these
Trends what will be the impact of rising
Global debt and artificial intelligence
earlier today I spoke to Borge Bren the
president of the world economic Forum
here's an excerpt of that
conversation Mr Bren welcome to first
post and thank you for speaking with us
thank you for inviting me we living in a
world with two major conflicts uh two
major Wars rather and multiple other
conflicts and deepening divisions first
of all what impact do you see on the
global economy in the year
ahead so the global economy is is doing
much better than we expected so we were
afraid that we're going to be faced with
the recession uh this year and uh we do
now expect the global economy to uh then
uh grow more than 3% but we are what we
are faced with instead is kind of a
global geopolitical recession and we do
hope that those conflicts that you were
mentioning Ukraine Gaza conflict uh
doesn't uh then escalate in a way where
they will also have sever negative
impact on trade and growth how do you
think India is fairing in this larger
global environment and what is your
assessment of India's growth story and
trajectory so India is also an economy
that of course relies on uh other
countries and the global uh situation uh
but since growth is back even if it's
lower than Trend growth uh in the last
three decades uh Trend growth was close
to 4% now we are a little bit more uh
than 3% India is doing incredibly well I
have to say that India uh is the fastest
growing of the large economies uh in the
world if India continues with its
reforms I think India in the coming
decade can become a 10 trillion US
dollar economy and what does that mean
it means that India will be the third
largest economy in the world and it
means that uh more people get
opportunities for jobs and a better
livelihood we should not forget that
India has due to this growth that we
have also seen the last years
eradicated more than um eradicated
poverty at an impressive scale 400
million people has been lifted out of
extreme poverty this uh has only been
seen in China at that pace in the past
and India is a democracy so with all all
the compulsions or the trappings of a
democracy uh to be able to achieve this
is is interesting uh and this 10
trillion figure is something that you
have mentioned in the past as well
you've said that India is on track to
becoming A1 trillion doll economy in the
coming years what is The X Factor that
you see uh in the Indian economic
landscape why is it able to Buck the
global trend of slowdowns is it the
policy decision is it larger
geopolitical forces or is it a
combination of the
two all the about I would say uh the
reforms have been important we're seeing
that uh infrastructure is changing very
fast and in the hundreds of new airports
we also seeing uh trains and Roads we
are also uh seeing that uh the Indian uh
economy is opening up uh more open to
foreign direct Investments More Level
Playing Field of course course also
India has benefited from this
diversification uh of uh value chains uh
many countries say they cannot have just
uh 80 90% of products being manufactured
in one country and you also have this
so-called friend Shoring uh that uh
India is benefiting from especially I
think the largest economy in the world
the US also AR no um increasing
manufacturing uh coming uh from um India
just look at Apple there's not a lot of
Apple iPhones produced in India just a
few years ago and now is like 25% of
their uh production and I would also add
that um we're seeing stronger growth in
services and the digital economy than
the traditional manufacturing and India
is stronger on services and digital so
also the fact India has
quite digitally literate population
especially the young is working in its
interest and also of course this uh uh
digital ID uh was important in this uh
broader context so from a policy
perspective what would your prescription
for New Delhi be more of the
same uh more of the same I would also uh
make sure that uh the revenues that will
come from a growth of 8% uh are invested
in areas where it further increases
India's competitiveness in the future in
fact Global agencies like the IMF and
the World Bank have also been raising
the concerns over Rising levels of debt
especially in the developing world uh
what sort of risk do you think this
unsustainable debt uh poses uh to the
global economy the problem is that when
the growth is uh pretty low to go into
an a austerity situation now would also
not uh be a good thing because we still
have to support uh growth but the
interest rates are also High because uh
of the inflationary pressure uh that is
there a lot of this debt was taken uh
and committed in a situation where there
was Sero interest and when you know have
4% interest uh interest rates has now
become the
largest budget
cost in many developing countries and uh
this is very vome these money should
have been invested then in school
education and health and infrastructure
Mr Bor Bren thank you very much for
sharing your thoughts and insights with
us thank you so much for inviting me
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