Bell ringing for an economic recession
Feb 21, 2023
There is a bell ringing for an economic recession very soon. According to economic experts, financial experts, and analysts, 2023 will be a bad economic year for the world. The predicted reason for the recession is inflation. Many institutions claim that the recession has already begun.
In Europe and other countries, the recession has already started and is ongoing. In India, the rising interest rates, the weakening of the currency, and the mounting public debt are the reasons for the rising food and fuel prices.
The world economy has been suffering for a long time due to the war. However, things could change in 2023 if there is a sign of wartime relaxation. The Russian president, Vladimir Putin, has shown interest in bringing down the war as he is realizing that Russia is suffering immensely and that it is not easy to win the war against Ukraine due to western support.
So he's attempting a face-off method to get out of the sticky situation. As predicted by rating agencies, the future belongs to India, but that doesn't mean that India will be immune from the economic crisis. But we will have to take steps to ensure stable economic growth.
Arresting Inflation and Rising Interest Rates
The new World Bank study says that for central banks across the globe, raising interest rates to control inflation may not be worthwhile. This can only lead to a series of financial crises associated with the recession. And yet, there is no hope in 2023 for the world to improve its economic system.
Falling rupee prices
The Indian rupee has fallen to an all-time low against the US dollar. Experts say that this is due to the growing trade deficit, which means that imports are increasing at a much faster pace than exports.
Mounting public debt
According to experts, India's $2.7 trillion economy is the seventh largest in the world, yet it faces low household income, high government debt, and weak policy reforms and implementation. It is stated that India's government debt could mount to a whopping 81% of GDP by 2024.
Zero COVID Policy
Additionally, due to the "zero COVID" policy, China is suffering massively. But China has realized now that this is not going to work for a long period of time, and they have to come out to save their interest in the economy. COVID is destroying their plans or dreams, including China's, which aims to become the world's No. 1 economic country. But, given the current state of affairs, it is a pipe dream, at least for the next 20 years.
China is very weak economically compared to the US. What we learn from China is that we are not supposed to take any preventive steps in the name of COVID, as it will be there for many years and we will have to live with it and yet progress.
Because of Indians' savings nature, India was in safe mode during all of the bad times called recessions; it helped them to be safe, and Indian domestic need is large, so it can always give the energy to keep the economy alive. Again, we must reduce imports to balance the economy so that currency fluctuation will not be a bigger challenge for us.