Independence Day 2023: Five key global and domestic macro developments over past year
1. India is the fifth largest economy: India is now the fifth largest economy in the world behind the US, China, Japan and Germany. As per the World Economic Outlook (WEO) database of the IMF, India’s gross domestic product (GDP) in 2022 was $3.39 trillion.
By 2027, the Indian GDP is expected to touch $5.15 trillion. 2. US evades a recession: The US evaded a looming recession even though the Fed continued hiking rates.
Since the Fed started raising interest rates last year, worries about a coming recession in the US mounted. Experts now believe the possibility of a US recession is beginning to recede. However, the risk of the US facing a recession is still not ruled out.
As per a Bloomberg report, "Economists are predicting the US will escape a recession, though it’ll be well into 2024 before anyone can be sure of it." Read more: ‘US economy will escape recession, but uncertainty persists until 2024’, says Economists 3. The war against inflation continues: Central banks worldwide have been vigilant in their efforts to combat inflation. Although inflationary pressures might be showing signs of easing, the battle against rising prices continues.
In July, the US Federal Reserve decided to increase interest rates following a brief pause in June. Conversely, the Reserve Bank of India (RBI) has chosen to keep rates unchanged over the course of the last three consecutive policy meetings. However, a recent upturn in inflation figures for July has ignited concerns that the RBI might opt to take decisive action and raise interest rates during its forthcoming meeting in October.
4. Indian rupee now above 83 mark: On August 14, the Indian currency closed at 83.18 per dollar. On August 12 last year, the rupee was at 79.64 per dollar.
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