"WE'VE NOT SUFFERED FROM THE GLOBAL SLOWDOWN"

CEA V. Anantha Nageswaran is confident that the economy will grow by 6.5 per cent this fiscal despite concerns

- SURABHI

CHIEF ECONOMIC

Adviser V. Anantha Nageswaran believes a simple recession or slowdown around the world, on balance, will not be a bad thing for India, which has till now remained largely unscathed by global economic developments. In an interview to Business Today, he says that while weak merchandise export growth is not a surprise, services exports remain resilient. Edited excerpts:

How do you see the Indian economy performing amidst the global economic slowdown?

The global slowdown is not so big an issue for India. Even last year, the global economy was beginning to slow down... commodity prices went up, interest rates went up, while merchandise exports growth in India stagnated. But we achieved a 7.2 per cent real GDP growth in FY23 and I have said many times that this will eventually be revised higher when the final numbers come out in January or February 2026. The point is we have not suffered from the global slowdown, even though export growth might have been hit. This year too, merchandise exports are struggling, which isn't surprising given the state of global demand... But services sector growth is quite resilient. There always seems to be demand for Indian IT exports or global capability centre exports. Overall, I would even argue that a global slowdown to the extent that it puts a lid on commodity prices and on interest rate increases is a good thing for us on balance. However, that is the case only as long as it is not a very deep and prolonged recession accompanied by a financial sector stress. A simple garden variety recession or slowdown in developed economies or economies around the world, on balance, will be actually not a bad thing for us.

What are the big challenges and the big advantages for the economy?