Home / Economy / Subdued global demand in 2023 could impact exports

Subdued demand in 2023 could suppress global trade and impact several countries, including India, according to the Economic Survey 2022-23 tabled in Parliament on Tuesday.

However, the survey stated that out of an export target of $ 400 billion set for 2021-22, India has already attained more than 75% of it by exporting goods worth $ 301.4 billion, which is actually higher than the export target of $ 300 billion set for the April-December period of 2021-22.

“This shows that India is well on track as far as attaining the export target is concerned. Sharp recovery in key markets; increased consumer spending; pent up savings and disposable income due to announcement of fiscal stimulus by major economies; global commodity price rise and an aggressive export push by the government have bolstered exports in 2021-22," the survey added.

As per United Nations Conference on Trade and Development (UNCTAD) latest global trade update, global trade growth turned negative during the second half of 2022, and geopolitical frictions, persisting inflationary pressures, and subdued demand are expected to suppress global trade further in 2023.

“This is likely to affect many countries, including India, with the prospects of sluggish exports continuing into FY24, compared to the promise shown at the beginning of the current year," it added.

Talking about the risks posed by global uncertainties, the survey highlighted that the balance of risks for global trade is “tilted to the downside".

“The biggest downside risk emanates from the pandemic itself, particularly with resurgence of new variants such as Omicron," survey highlighted.

In addition to the surge in global inflation, as outlined above, longer port delays, higher freight rates, shortage of shipping containers, shortage of inputs such as semiconductors, with supply-side disruptions being exacerbated by recovery in demand, pose significant risks, inter alia, for global trade, it further said.

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