Not all smooth

The World Bank’s latest outlook has as much for India to cheer as to worry about. Its broad assessment is of our economy’s resilience to global shocks and an imminent easing of pain stemming from high inflation and a wide current account deficit, even as Indian banks look healthy. All this should reassure observers that there is much going on for India. Yet, as the world economy stares at a possible recession, ours won’t escape unhurt. While domestic drivers might help offset some external pressures, exports may take time to spring back. The World Bank’s growth forecast of 6.3% for 2023-24, which it slashed from 6.6%, reflects the challenges ahead. A plus-6% expansion figure would still stand out, no doubt. But even this growth calculus could get upset by shocks like this week’s decision of a global oil cartel to cut output sharply. Since we import most of the crude oil we consume, we can’t rule out local price pressures intensifying again, even if cheaper imports from Russia ease our bills to some extent. Pricier imports could also hit India’s external balances and cause rupee turbulence. Indian policymakers don’t have an enviable task ahead of them.