According to Shaktikanta Das, governor of the Reserve Bank of India, India would have the fastest-growing major economy in 2022–2033, clocking 7% growth. This is due to India’s solid economic fundamentals and stable banking sector.
Das stated during his speech at the HT Leadership Summit 2022 that the entire planet has endured numerous shocks. The COVID-19 pandemic, the conflict in Ukraine, and the current financial market instability are referred to as the “triple shocks.”
Das claimed that the financial market instability is being caused by central banks’ tightening of policies, particularly those in advanced economies under the leadership of the US, and that emerging the consequences of this spillover are being felt by economies.
He continued, “The European Union is confronting a recession position in this kind of successive turmoils, but there are ways that it will avoid that.” While the US is remaining stable, other nations are experiencing slower development. The banking sector, which is the financial sector, is stable due to all the elements linked to banking, non-banking lenders, or other major players in the financial sector,” said he.
According to the current situation, the growth numbers appear positive, he said. According to IMF predictions, India would grow by roughly 6.8% this year. India is now one of the world’s main economies with the quickest rate of growth as a result “added he. Das did, however, warn that India faces a significant inflation concern. Food and energy prices increased significantly in September, raising the retail inflation rate from 7% in August to 7.4%. Inflation is, therefore, a concern that we are now and efficiently addressing “added he.
The Governor added that India is assuming the G20 chairmanship during what is arguably the most difficult year in contemporary times. In comparison to many other nations, India is taking over the G20 presidency with stronger macroeconomic fundamentals, according to Das.
Das responded, “It’s not so,” in response to claims made in some quarters that the RBI was utilizing its foreign exchange reserves carelessly. He noted that the funds are being saved up for “rainy days.”
“And when it rains, as I have previously stated, you must grab your umbrella and use it. We didn’t acquire reserves purely for display purposes at the Reserve Bank of India. And even now, our reserves remain a pretty comfortable amount.”
For the week ending November 4, India’s foreign exchange reserves fell by USD 1.087 billion to USD 529.994 billion due to a sharp decline in gold reserves. In October 2021, the country’s foreign currency reserves reached an all-time high of USD 645 billion.