The Indian economy has endured geopolitical shocks in the last couple of years and is headwined to navigate the uncertainities that lie ahead, RBI monetary policy committee (MPC) member Jayanth R Varma said on Sunday.
Jayanth asserted that he expects a benign outcome in 2024 where inflation comes down and rgwoth remains robust. "The Indian eocnomy has withstood all these shocks, from Russia-Ukraine war, Israel-Hamas war, rising oil prices, Houthi Attacks)in the last couple of years, and I do not believe that the geopolitical situation will be significantly worse in the near months that what we have experiences in the recent past" he told PTI in an interview.
Varma, a professor at the IIM, Ahmedabad, said the continued slowdown in China has led to sharply reduced demand for energy and other commodities, and this too has ameliorated the adverse effects of supply shocks.
"On the whole, I have great deal of confidence that India will be able to navigate the uncertainities that lie ahead", he said.
India's economy is projected to grow by 7.3% in the current fiscal, higher than 7.2% in 2022-23. As per the International Monetary Fund(IMF) world economic outlook, the global growth is estimated to decelerate from 3.5% in 2022 to 3% in 2023 and further to 2.9% in 2024.
Th situation around Bab-el-Mandab strait, a crucial shipping route connecting the Red Sea and the Mediteranean Sea to the Indian Ocean, has escalated due to recent attakcs by Yemen-based Houthi militants.
Due to these attacks, the shippers are taking consignments through the Cape of Good Hope, resulting in delays of almost 14 days and also higher freight and insurance costs. The Red Sea route is also crucial for energy shipments.
Also, on Varma's outlook on inflation for 2024, the eminent economist said he expects a benign outcome where inflation trends down and growth remains robust.
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