World Bank President Ajay Banga said on Wednesday that amid the global slowdown, the Indian economy is getting natural support from its domestic consumption as a large part of the country’s GDP is based on domestic demand.
Banga told reporters after meeting Finance Minister Nirmala Sitharaman that they discussed issues related to the G20 summit and cooperation between India and the World Bank.
“We discussed points related to the G20 meeting. We also discussed how the World Bank and India can work outside the G20. India is the largest market for the World Bank in terms of portfolio and all our interests are here,” he said,
The meeting of Finance Ministers and Governors of Central Banks of G20 countries has concluded in Gandhinagar. It also discussed the role of multilateral development institutions like the World Bank and the International Monetary Fund.
Banga, the first person of Indian origin to head the World Bank, is currently on a visit to India. He took command of this international organization in early June.
On the outlook of the world economy, Banga said that early next year, there is a high risk of slowdown. However, the Indian economy can get relief on the back of its domestic consumption.
“A major portion of India’s gross domestic product (GDP) comes from domestic consumption. So even if there is a slowdown in the world for a few months, relying on domestic consumption would be a natural support for the Indian economy,” Banga said.
In the context of the world economy, Banga said, “I think we have done better than we thought. But I still believe that there is a high risk of a slowdown in the beginning of next year. I also said in the G20 meeting that forecasts are not luck and you should not think that forecasts are correct.”
Banga also visited a skill development center during his visit to Delhi where he interacted with the students on various issues.
During this, Banga told reporters that India has emerged stronger from the challenges that emerged during the Covid-19 pandemic, but it needs to maintain the current pace of economic development. He said that in the era of global slowdown, India is taking many such steps which are helping to keep it ahead.
When asked about the possible increase in high-income jobs, Banga said, “We have to understand where these jobs are. These jobs are in the technology sector and are very few in number. Then there are such jobs in the manufacturing sector. India currently has an opportunity to take advantage of the ‘China plus one’ strategy.
Under the ‘China plus one’ strategy, multinational companies want to add another country to China as their manufacturing hub. Due to this strategy, India has emerged as a potential contender.
“India has to keep in mind that the opportunity arising from this strategy will not be available to it for 10 years. This is an opportunity available for three to five years in which there is a need to move the supply chain to another country or to connect another country with China,” Banga said.
