India expected to be world’s fastest growing economy in 2023 and other economy stories you need to read this week

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Stephen Hall, Writer, Formative Content

• This weekly round-up brings you the key economic stories from the past seven days.
• Top stories: India expected to be world’s fastest-growing economy in 2023; UK economy contracts; US senators propose Fed overhaul.

1. India expected to be world’s fastest growing economy in 2023

India is set to be the world’s fastest growing major economy in the year ahead, as a post-pandemic retail boom and recent bank balance-sheet repairs lure new investment. This is likely to fuel hot demand for everything from cars to televisions, coal and airliners.

The world’s fifth-largest economy is expected to grow 6% in the fiscal year ending March 31, 2024, according to a survey by the Indian central bank this month.

While slower than the current fiscal year’s projected 6.8% growth, India’s economic outlook contrasts with bleaker 2023 projections in the United States, Europe and most noticeably China where a recent surge in COVID-19 infections is expected to hobble activity next year.

The more upbeat mood is shoring up spending and investment in India, although the recovery is expected to be an uneven one, benefiting the urban and domestic sectors more than struggling rural and export-oriented parts of the economy.

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News in brief: Economy stories from around the world

Seven Republican US senators announced a new bill aimed at reshaping the Federal Reserve’s 12 regional banks, amid concerns that those institutions have become too political. In a news release from outgoing Senator Pat Toomey, the legislators said they are calling for regional Fed bank presidents to be presidentially nominated and confirmed by the Senate.

Britain’s economy contracted more than first thought in the third quarter of this year, putting it bottom among the Group of Seven major advanced nations ahead of what is shaping up to be a dismal 2023, data showed. Economic output fell by 0.3% in quarterly terms compared with a previous estimate of -0.2%, the Office for National Statistics said.

France will have high inflation levels in the next few months, particularly regarding food items, before it will then likely ease in mid-2023, French Finance Minister Bruno Le Maire told Sud Radio. “My priority is for prices to go down from mid-2023 onwards.”

Japan will pay close attention to the COVID-19 situation in China, in addition to risks from a global economic slowdown, price hikes and supply constraints, according to its monthly report for December. “If China’s infection situation impacts on supply chains or trades, it could also impact on Japan’s economy as we’ve seen earlier this year,” a Cabinet Office official said.

Germany’s finance ministry expects activity in Europe’s biggest economy to remain subdued during the fourth quarter of this year and first quarter of next and sees declining inflation rates during 2023. “Overall, economic developments are expected to remain subdued in the winter half (year),” it said in its monthly report.

Portugal’s parliament has approved a 33% tax on windfall profits that energy companies and food retailers may be bringing in with inflation at a near three-decade high. Tax affairs chief at the Finance Ministry, Nuno Felix, said the new “exceptional and strictly temporary” tax was in line with that approved by the European Union for the energy sector.

The World Bank has cut its outlook for the Chinese economy for this year and next. It now expects China’s economy to grow 2.7% in 2022, before recovering to 4.3% in 2023.

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