Global Tariff Uncertainty Could Affect Growth, but India is Positioned to Navigate Challenges: Garima Kapoor
According to Garima Kapoor of Elara Capital the IMF's 6.2% growth projection for India is accurate but RBI and the Ministry of Finance may need to lower their forecasts. The Indian economy maintains support from pro-growth policies and favorable cyclical tailwinds despite ongoing trade uncertainties.
Global Tariff Uncertainty Could Affect Growth, but India is Positioned to Navigate Challenges: Garima Kapoor
Help us understand the IMF statement they released yesterday. Their presentation contained comprehensive details about worldwide economic growth alongside projections for India's economic future. Tariffs have caused a reduction in India's economic growth projection from 6.5% to 6.2%. Based on this information what is your understanding and do you agree that this represents a reasonable adjustment and assessment for our financial year's direction?
Garima Kapoor: The International Monetary Fund's forecast of 6.2% economic growth for India appears to be realistic although it remains 30 basis points lower than both the Reserve Bank of India and the Ministry's predictions.
The estimates from both RBI and the Ministry of Finance need revision downward since we now have better insights into the outcomes of trade-related uncertainties. The combination of India's business cycle turning alongside government and RBI's pro-growth stance together with clearer rate policies and an aggressive rate cut cycle along with crude oil prices below 67-68 and dollar rates below 100 has generated stronger cyclical tailwinds for the Indian economy than were present six months ago.
India should maintain its economic growth rate between 6% and 6.2% even with an expected correction in the global economy assuming all other conditions remain constant.
My reference pertained to previous reports about China shipping which remains unaffected while President Trump announced potential tariff reductions on China though they won’t be removed entirely.
The increasing capacity pressures led firms to recruit new staff throughout different sectors while goods producers achieved their greatest employment growth since March 2005 when the survey started.
