Pictured: People visiting India Gate in New Delhi. – Every morning and evening and for several hours among the tens of millions of Indians sit idle on congested highways and dangling from the sides of crowded passenger trains in what is the world’s most populous country. (AFP/SAJJAD HUSSAIN)
Jakarta, CNBC Indonesia – Economic growth in India is expected to outpace China this year and next. This was conveyed by the Organization for Economic Cooperation and Development (OECD), Friday (9/6/2023).
In its latest global economic outlook report, the OECD predicts India, China and Indonesia will exceed gross domestic product projections for 2023 and 2024. Overall, the organization forecasts global growth of 2.7% this year.
That would mark the second lowest annual rate since the global financial crisis, except for the 2020 Covid pandemic year.
“Slumping energy prices and headline inflation, easing supply constraints and the reopening of China’s economy, coupled with strong jobs and relatively resilient household finances, all contribute to the projected recovery,” said OECD Chief Economist Clare Lombardelli in a statement. CNBC InternationalFriday (9/6/2023).
“Nevertheless, the recovery will be weak by past standards. Monetary policy makers need to take a tough road.”
The OECD predicts India’s economy will grow 6% in 2023 and China’s will grow 5.4%. Indonesia is predicted to grow 4.7%.
India’s 2022 full-year growth momentum is expected to continue into the year after higher-than-expected agricultural output and strong government spending.
The OECD added that looser monetary policy in the second half of next year should help household spending momentum return. The institution also expects India’s central bank to switch to mild rate cuts from mid-2024.
The report added that they expect OECD countries’ average headline inflation to fall to 6.6% this year, after peaking at 9.4% in 2022.
The report also predicts the UK will experience the highest inflation rate among developed countries this year. Of the countries that are the focus of the OECD’s inflation analysis, only Argentina and Turkey are expected to have higher headline rates of inflation.
To combat inflation and address concerns that lie ahead for the global economy, the OECD advises governments to take the following three steps namely maintaining a tight monetary policy, removing and targeting fiscal support, and prioritizing pro-growth spending and structural reforms that increase supply.
“Nearly all countries have higher budget deficits and debt levels than before the pandemic,” the organization said in its report.
(luc/luc)
2023-06-09 14:50:00
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