India’s economic outlook: Balancing optimism amidst global exigencies

The confluence of headwinds arising from geopolitical uncertainties, sharply rising prices (including commodities), supply shortages, disruption in trade and financial transactions, and last but not the least, a possible slowdown of the advanced economies have deteriorated the economic fundamentals of most emerging economies, and India is no exception. As the COVID-19 lingers on, a few nations continue to rely on lockdowns to contain its spread. All these factors have weighed on the economic outlook, and we had to temper our growth expectations for this year and the next one from our previous expectations.

We believe these risks are not strong enough to deny India an economic rebound given the domestic demand potential, services export opportunities, and its emergence as an attractive investment destination in the manufacturing space. The optimism about India’s economic recovery remains intact and is expected to be the fastest-growing economy that will world growth.