Its premature to think India will replace China in influencing global economy: Raghuram Rajan

Former Reserve Bank of India governor Raghuram Rajan commented on Tuesday that it is too premature to think that India will replace China when it comes to influencing global economic growth.

However, as India is already the world's fifth largest economy, the situation may change going forward and has the potential to keep expanding.

He was speaking at a World Economic Forum (WEF) press briefing during the recently released Chief Economists Outlook that saw the majority of them expecting a global recession in 2023. Rajan said any recovery in the Chinese economy would definitely boost the global growth prospects. He said policymakers at this point of time are looking at the labour market and also at the housing market.

"Is it all gloom and doom? Not probably...If Mr Putin decides to end the war, there would certainly be an upside," Rajan noted. He said there are still 12 months to go and if China improves, that could be good.

"China is working its way through a pandemic and there will be a Chinese recovery this year, probably as early as March or April. Some of that would be in domestic services which may not have any impact outside. But any improvement in manufacturing may have some impact by way of softening prices outside," he said.