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India’s macroeconomic fundamentals strong: CEA | Economic Times

Chief economic advisor KV Subramanian has said the country’s macroeconomic fundamentals are strong and the tapering of monetary stimulus by the US Federal Reserve should not be a concern.“When macro fundamentals of a country are not very inspiring, that’s when the impact (of tapering) is felt much more. Fact that economic fundamentals – current account deficit, inflation, forex reserves and all other metrics – are very strong and I absolutely do not see it as that much of a concern,” Subramanian told media persons on Tuesday. He said fundamentals were strong because of the several reform measures undertaken by the government. “We have to understand that international investors look at macroeconomic fundamentals. Data in terms of macroeconomic fundamentals now vis-à-vis at the time of global financial crisis are strong,” Subramanian said, adding that the country is all set for robust growth on the back of structural reforms, government’s capex push and rapid vaccination. US Federal Reserve chairman Jerome Powell indicated at the recent Jackson Hole Policy Forum that it may start scaling back the Fed’s $120 billion-per-month bond buying programme, rolled out last year in response to the Covid-19 crisis, this year. “Whenever the tapering happens, India should be in a good position to face it,” said the CEA. The CEA said investment-led growth had been enabled through policy push through the several reform measures announced over the past year and a half and capex push.

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