Lagatar24 Desk
New Delhi, Oct 15: State Bank of India Chairman Dinesh Khara on Friday said that the effects of a worldwide recession, which the International Monetary Fund and the World Bank are growingly concerned about, won’t likely be as severe in India as they would be in other nations.
India is doing quite well, according to Khara, who spoke to PTI in an interview on the sidelines of the annual conference of the International Monetary Fund and the World Bank.
The country’s anticipated growth rate is 6.8%, and inflation is “much under control.”
“Majorly, it (India) is an inward-looking economy in terms of demand because a significant component of the GDP is essentially addressed to the domestic economy. So, from that point of view, I think it (global recession) will have an impact but it won’t be as pronounced as perhaps (it will be on) other economies which are fully coupled with the globe,” he said.
“If we look at the beta factor, perhaps the Indian economy’s beta factor would be much lower as compared to some of the other larger economies that have a significant component of export,” he added.
According to Khara, India is doing relatively well given the state of the world economy given its predicted growth rate of 6.8% and inflation that is “much under control” despite the global challenges.
Demand-driven inflation is not the main driver of the problem. According to him, it is effectively supply-side inflation.
“If we really look at the supply-side aspect of inflation, we’ve got a situation where capacity utilisation is just about 71 per cent. To that extent, there’s elbow room available for improving the capacity. So essentially, supply chain disruption, which has happened on account of the global headwinds, and… its impact on crude prices is one of the contributing (factors)…,” he added.
According to Khara, all economies are experiencing a difficult period at the moment, and the government is focusing on addressing these issues.
“Future economic prospects for India are anticipated to increase,” he said.
