BackChanging geo-political scenario will not affect business, growth: WEF
India is doing a lot better in competitiveness at a time when there is a lot of uncertainty about global economy, says Jennifer Blanke, chief economist, WEF
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New Delhi: The heightened tension over geo-political issues between Indian and Pakistan will not affect business and growth, Jennifer Blanke, chief economist, World Economic Forum, said.
Her assessment came on the back of World Economic Forum’s latest global competitiveness survey where India has jumped 16 positions to 39 among 138 economies. India gained most in parametres such as health and primary education, infrastructure, macroeconomic environment and market size.
“I don’t think any sort of reassessment is required today. As a developing economy, you are seen through a prism of challenges and also opportunities," Blanke said, who is also known for her extensive work on competitiveness across the world.
India is doing a lot better in competitiveness at a time when there is a lot of uncertainty about global economy, especially in advanced economy. China continues to be on top among Brics but it has stopped improving but India has been improving, she said.
“South Asia is the fastest growing region in the world. We have geo-political tension in other places. But, you will continue to have rapid growth. From everything that i have seen, there is no reason to believe that (growth will be hampered)," she added.
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The statement came close on the heels of the Indian army’s surgical strikes on terror launch pads across the Line of Control (LoC) in Pakistan-occupied Kashmir (PoK) last week, which was triggered by a terrorist attack on an Indian army base in Uri, Srinagar. Pakistan has denied that these strikes took place. Following the surgical strikes, Pakistan, the Indian army claims, has violated at least eight times the ceasefire that exists between the two countries.
If the tension escalates, it is expected to affect business sentiment, and economy. However, industry is with the government on the issue, said Chandrajit Banerjee, director-general, Confederation of Indian Industry.
“Indian industry has appreciated this government’s phenomenal positioning on foreign policy. It has a lot of positive effect on what’s happening in the region vis a vis where India’s positions are. India’s moves have been appreciated well by the industry primarily because the government has taken definitive and clear steps, which show the strength of India," Banerjee said.
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“Having said that, one does not see economy or business getting affected... So, economy does not really get affected at all. We see India’s growth path to be very strong. We see demand picking up. We see investments to be coming back. We have always been saying that with strong monsoons and with good agriculture bounce back we do expect investment demand and consumption demand picking up this year," he added.
Less than three months after trimming its India growth forecast, the International Monetary Fund (IMF) on Tuesday raised it by a tad, citing the resilience of its economy and robust growth momentum. The IMF now expects the economy, Asia’s third largest, to expand 7.6% in 2016-17, up from its earlier projection of 7.4%.
India’s economy grew 7.6% in 2015-16 and the government expects it to grow close to 8% in 2016-17.
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