World Bank's Chief Economist, Indermit Gill, praised India's economic management, highlighting its Goods and Services Tax (GST) reform, infrastructure growth, and technological innovation. He further commended the country's fiscal stimulus scale back and emphasized the need for reducing the high debt-GDP ratio and boosting private investment.
Gill also stressed the importance of improving skilled women wages to increase female labor force participation. He urged for a manufacturing push in the country to enhance exports. Despite these advancements, Gill expressed concern over India's inability to effectively exploit the "China plus one" trade strategy, a policy aimed at reducing dependency on China by diversifying trade partnerships.
Gill warned of an impending global economic slowdown due to increased public and private debts in the aftermath of Covid-19 and escalating trade restrictions. He pointed out that sustained high oil prices due to tensions in West Asia could further exacerbate this slowdown.
The economist predicted a strict monetary policy in 2024 to counter inflation. He highlighted that central banks' response would be crucial as high interest rates are expected for inflation control in developing countries. The potential impact of oil price fluctuations on inflation was also noted.
While acknowledging India's significant strides in technology and infrastructure over the past decade, Gill maintained concerns over high debt levels, insufficient private investment, and failure to fully utilize trade diversification strategies.
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