BUSINESS MONITOR
Bad weather, don’t step out, warns Suman, my maid, as she sweeps away kachra (waste) at home. True, dark clouds and intermittent rains. Regular power disruption but managed thanks to diesel generators in the housing complex, not minding the unstoppable fuel price-induced inflationary pressure on the electricity bill.
The Chennai Chess Olympiad 2022 at the historic Mamallapuram opened with aplomb, and the preceding A R Rahman’s specially composed anthem for the global event does not enthuse me. Nor does the 3–0 clean sweep in the West Indies vs. India ODIs under Shikar Dhawan, certain-to-be-dropped for the World T20 in a few weeks, bring cheers. Mood kharab hai. Downbeat, sure.
Galloping inflation
Reason: the economic worries. Six percent inflation. Despite the deep discount by various entities offering everything under the sun, everything is expensive. Russia vs. the European Union and the US over Ukraine remains unresolved five months after the territorial expansion aggression began.
Saudi Prince, the ipso facto ruler, Mohamed bin Salman bin Al Saud is unmoved by the placatory gestures, including US President Joe Biden’s visit to the world’s biggest oil producer to convince him to increase oil production to halt the running away fuel price. So, the global impact.
Not to be forgotten is the supply chain disruption caused by China-originated COVID-19. It is untamed, leading to frequent lockdowns affecting production in the world’s manufacturing hub.
Global slowdown
The global economy is set to slow down sharply for the next two years due to stalling growth in the world’s three largest economies. According to the latest update to the IMF’s World Economic Outlook, price pressures will last longer.
“The world may soon be teetering on the edge of a global recession, only two years after the last one,” the IMF’s chief economist Pierre-Olivier Gourinchas writes in a blog. “Amid great challenge and strife, strengthening cooperation remains the best way to improve economic prospects and mitigate the risk of geoeconomic fragmentation.”
The interdependence among countries has not evaporated post-Covid outbreak. A mild sneeze in the US, China, and Europe impact the rest of the world economically.
Every nation on earth is fighting a serious battle on the economic front. The ailment is universal: economic slowdown, rising food and fuel price leading to the fiscal challenge. Growth versus inflation is the name of the game in the corridors of central banks worldwide, and no final word is out yet.
India’s forex reserves are thinning to stem the falling Indian Rupee vis-a-vis US Dollar, the global currency, besides bridging the ballooning gap between imports and exports — the balance of trade issue.
The silver lining
The only silver lining is that India continues to be the fastest growing economy: 8.1 % against China’s 8.7% in 2021, and IMF projects that India to leap above China’s 3.3% and post 7.4% in 2022; no doubt, China, IMF believes, would improve to post 4.6% growth in 2023 as against 6.1% for India the same year.
Under these trying circumstances, it is tough to be perpetually cheerful or upbeat. No doubt, life is full of ups and downs. But since the COVID-19 advent, it is a miracle that we survived leading the growth table.
Everything will be okay, prophesies Suman as she exits to sweep and clean some extra home to make up for the erosion in the value of the Indian Rupee. Working hard and extra hours is her recipe for survival.
To remain afloat, I switched to Indian whisky from the imported single malt picked from the Duty-Free Shop or Army canteen.
A few swigs down the gullet, and the caller at the other end asks: Will India go bankrupt the way Sri Lanka and Pakistan? Get lost, I shout and bang the phone down.
Mood spoiler!
(Main/featured image by Gerd Altmann from Pixabay has been used for illustrative purposes only)
Also by the same author: Will the latest Nitin Gadkari gamble to root out highway corruption pay off? – THE NEWS PORTER
The author is a seasoned business and economic journalist. He can be reached at konsultramesh@gmail.com. In this column, ‘Business Monitor’, he presents a global perspective on happenings in the world of business, commerce, economics and trade. The views are the author’s own and The News Porter bears no responsibility for the same.
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