Former RBI Governor Raghuram Rajan said on Tuesday that it is premature to think that India will replace China in influencing global economic growth.
However, the situation may change going forward as India is already the fifth largest economy in the world, it is likely to grow and expand.
At a World Economic Forum (WEF) press briefing on the recently released Chief Economist Outlook, which found that most expect a global recession in 2023, Mr. Rajan said any recovery in the Chinese economy would certainly boost global growth prospects.
He said policymakers are looking at the labor market and the housing market at this time.
Referring to the United States, he said, housing is not selling there, but prices are not falling.
“Is it all gloom and doom? Probably not…If Mr Putin decides to end the war, there will definitely be an upswing,” Mr Rajan noted.
He said there was still 12 months to go and if China improved it could be good.
“China is working its way through the pandemic and there will be a Chinese recovery this year, probably in March or early April. Some of that will be in domestic services that may not have any impact outside. But there may be some improvement in manufacturing. The impact is outside. By reducing prices,” he said.
Asked about India, Mr. Rajan said, “The argument that India will replace China is premature because India is a much smaller economy.”
“But with time, this may change as India is already the fifth largest economy and it may grow,” he added
