WASHINGTON: Economic analysts have expressed fears that America may go through an economic recession in the next year, and its effect may have to be seen at the global level. Experts here believe that it will not have much impact on India.
A recession may come early next year
According to a report by US-based company Goldman Sachs, there is a 30 percent chance that America could be in the grip of economic recession in the next year itself and 25 percent in the second year. Bank of America Securities also sees a nearly 40 percent chance of a US recession next year.
Economists’ opinion on India’s development
Crisil’s Chief Economist, DK Josh told that the impact of the US recession on India will depend on its magnitude. If there is a slowdown in the US, it may slow down India’s exports but will also bring down commodity prices globally which is positive. So, for now, the slowdown is likely to be shallow and its impact on India will be minimal.
Japanese brokerage firm Nomura Holdings also said there are growing signs that the world economy is entering a “synchronous growth slowdown”, meaning the country can no longer rely on a rebound in exports to drive growth. and “has led us to predict several recessions”.
Madan Sabnavis, Chief Economist, Bank of Baroda told that there will be no impact of the recession on India, as, among other factors, global commodity prices will also fall, which is positive. “However, due to heavy dependence on EU and US as export markets, India’s exports will be negatively affected, and global trade will slow down.
India may see a slowdown (slow growth) for some time, but not a slowdown (negative growth) for now, Sabnavis said, adding that the country’s domestic economic factors are positive, which should help India avoid any major negative impact of a global adverse economic event. can save from.
Independent market analyst Ambareesh Baliga said India is a predominantly domestic consumption economy, and as long as internal economic factors are positive, there will be no negative impact of the US slowdown in India. “Apart from the emotional impact on the Indian economy and markets, there could be a short-term adverse impact on exports to India.
Acknowledged the effect of increased oil prices
Due to the fear of recession, crude oil has already reached its 12-week level. Brent crude oil fell by $2.08, or 2.0 percent, to $100.69 a barrel. Among other things, prices have also started to fall, as global nickel-metal prices fell by 50.2 percent, aluminum by 36.4 percent from an all-time high this year.
Last month, the US Federal Reserve raised its key interest rate by 75 basis points (bps), the highest since 1994. The inflation rate in the US was 40-year-old against the central bank’s target of two percent. The high is hovering at 8.6 percent.
