Recession may not hit India as badly as some other countries: SBI head

Amid fears of a global recession in 2023, State Bank of India (SBI) chairman Dinesh Khara has said its impact may not be as pronounced in India as in some other countries. Khara pointed out that India was doing well, with a projected growth rate of 6.8 per cent.

In an interview with PTI on the sidelines of the annual meeting of the International Monetary Fund and the World Bank in Washington, Khara said, “With a projected growth rate of 6.8 per cent and inflation much under control, India is doing reasonably well.”

“Majorly, it (India) is an inward-looking economy in terms of demand because a significant component of the GDP is essentially addressed to the domestic economy. So, from that point of view, I think it (global recession) will have an impact but it won’t be as pronounced as perhaps (it will be on) other economies, which are fully coupled with the globe,” he told PTI.

Also read: Global economy’s outlook darkening, recession imminent, warns IMF chief 

“If we look at the beta factor, perhaps the Indian economy’s beta factor would be much lower as compared to some of the other larger economies that have a significant component of export,” he added.

“India’s growth prospects may improve”

He explained that the primary cause of inflation is not demand-led, but essentially supply-side.

“If we really look at the supply-side aspect of inflation, we’ve got a situation where capacity utilization is just about 71 per cent. To that extent, there’s elbow room available for improving the capacity. So essentially, supply chain disruption, which has happened on account of the global headwinds, and… its impact on crude prices is one of the contributing (factors)…,” he told PTI.

Also read: IMF cuts India’s 2022 economic growth forecast to 6.8%; ‘recession’ ahead

All economies across the globe are going through a rough patch, Khara said. He added that the government was focused on dealing with these factors. India’s growth prospects are expected to improve going forward, he said.

(With agency inputs)