US slowdown coming, will create global ripples: Raghuram Rajan

Noted economist and former RBI Governor Raghuram Rajan today said the global economic slowdown that was anticipated early this year has not yet taken place. Rajan also mentions it is difficult for the US Federal Reserve to engineer a soft landing, kicking off a ripple globally, which may create headwinds for India next year.

“At the beginning of the year, there were a lot of worries regarding the global economy. It led to worries regarding India. That slowdown has not happened. The US had a spectacular growth in a long time in the last quarter. We are now beginning to see signs that the US economy is starting to slow. The big question in the people’s mind is whether it is going to be a soft landing or a hard landing. It is going to be difficult to engineer a soft landing. And wherever the Fed goes, the rest of the world goes. Part of the problem with the Chinese economy is that it has not picked up since the pandemic. Europe has slowed considerably. India has benefited from the spectacular growth this year and will have to bear some of the headwinds next year. We will have to wait and see how much India will be impacted,” Rajan says.