Global Economic Recession 2023: The last few years have not been good for the global economy and the situation has not changed in 2023 as well. Inflation is not taking the name of reduction even after continuously increasing the interest. The Economic Recession which was only speculated since last year, has now proved to be true. China, which has been beating the trend for decades, is showing signs of slowing down. In such a situation, India’s economy is raising great hopes. Many agencies have been continuously expressing hope from the Indian economy and now the figures have started giving basis to all the expectations.
Recession has come in Europe
Before talking about India, let us know the situation of the world. Germany is the largest economy in Europe and the fourth largest economy in the world with a GDP of around Rs 4.30 lakh crore. During the March quarter, Germany’s GDP has registered a decline of 0.3 percent. Earlier, in the quarter of December 2022, the size of Germany’s GDP was reduced by 0.50 percent. In this way, Europe’s largest and world’s fourth largest economy has officially become a victim of economic recession.
bad condition of us
Looking at other top economies, there are no good signs from anywhere. America is facing many economic challenges these days. Till a day ago, there was a danger in front of the world’s largest economy that it would default in repaying the loan for the first time in history. Somehow the matter has been worked out in the US Parliament and for the time being this danger has been averted. During the month of April, retail inflation in America has been 4.9 percent. Due to this, the risk of increasing the interest rates by 0.25 percent once again by the Federal Reserve has increased in the month of June. If this happens, interest rates in the US will reach a high level of 5 per cent, which was close to zero per cent just two years ago. The fatal effect of increasing interest rates will be seen on the American economy, which is already on the verge of recession.
China started getting battered
China, known as the factory of the world, has been working as the engine of global growth for many decades. Right now it is the second largest economy in the world after America and its role in the global supply chain is decisive. However, some recent figures are showing signs of increasing pessimism. During the month of May, the manufacturing PMI in China fell to a five-month low of 48.8. This means that factory activity in China was the lowest in five months during May. There was a slowdown in the service sector. This is not considered a good sign.
India’s speed is strong
Now let’s talk about India. A day earlier i.e. on Wednesday, 31 May, many big figures related to the economy were released. First of all, let us look at the economic growth figures. The Indian economy outperformed all expectations and grew at 6.1 per cent during the March quarter. At the same time, during the entire financial year 2022-23, India’s economic growth rate crossed 7 percent and stood at 7.2 percent. This is the most spectacular economic growth rate compared to any major global economy. Releasing official figures, NSO has estimated the growth rate to be 13.1 percent during the current quarter i.e. April-June 2023. This means that the speed is going to be good in the coming times as well.
Government’s income increased
Earlier, the fiscal deficit figures were released and they were in line with the expectations. According to CGA data, India’s fiscal deficit in the financial year 2022-23 stood at 6.4 per cent of GDP. Even in the revised estimates of the Finance Ministry, the fiscal deficit was targeted to remain the same. This shows that the government is getting the benefit of increase in earnings as per the increased expenditure.
India’s stature strong
After this, the PMI data of the Indian manufacturing sector came out on Thursday. According to S&P Global, the PMI of India’s manufacturing sector increased to 58.7 during the month of May. This is the best figure after October 2020. This means that during the month of May, the factories of India performed the best in the last two and a half years. The good thing is that the domestic manufacturing sector is getting support from both local and external factors. Economist Pollyanna De Lima of S&P Global says that the fast trend in domestic orders has strengthened the base of the Indian economy. At the same time, due to improvement in external trade, international participation is increasing and India’s position in the global market is getting stronger.
what do economists say
Economist Dr. Sudhanshu Kumar of Bihar Institute of Public Finance and Policy believes that the Indian economy is going through some similar phenomena, which China has already seen. The WEF has talked about a snowball effect. This means that the Indian economy is moving forward like a big ball of ice and the number of times it is going round, the size is increasing more than before. In such a situation, the economy can see manifold growth in a few years. The government has laid a lot of emphasis on increasing manufacturing in the country. Manufacturing is increasing with the PLI scheme and this is helping in increasing exports. India itself is a huge market. Due to strong demand at the domestic level, the effect of external things reduces. This is the reason why India did not come under the grip of global economic recession even in 2008.
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