US GDP declines, know India’s loss
The US economy is the largest economy in the world. One of the disadvantages of globalization is that the domestic economies of all countries are influenced by the market conditions of other countries. According to the Bureau of Economy Analysis, America’s economy analysis agency, in the first quarter of the financial year 2022-23, the US economy has fallen by 1.6 percent. In view of the global situation, economic experts are seeing this as a possibility of recession in the country. The US gross domestic product (GDP) has fallen for the first time since the second quarter of 2020. Last year in the first quarter of 2021, America’s economy grew at a rate of 6.9 percent. Inflation in the US is at the highest level in the last four decades.
According to the third and final revision of the Bureau of Economy Analysis (BEA), the Real Gross Domestic Product (RGDP) declined by 1.6 percent on an annual basis in the period January to March of 2022. In the forecast, the GDP was said to fall by 1.4 percent. The BEA says that the rise in the cases of Omicron variants of Corona has affected the economy.
The impact of the Russo-Ukraine War
In the first quarter of the fiscal year 2022, the war between Russia and Ukraine affected the world economy the most. The supply system of the whole world was affected due to Russia’s attack on Ukraine. Apart from the supply chain, the food, finance and energy sectors have also been hit hard by the war. In the first quarter, all these problems had increased the price of essential goods, oil in the global market and labor cost. The impact of the decline in the first quarter continues in the second quarter as well. Inflation in America has never happened so much in four decades.
How will India suffer?
In the financial year 2021-22, the US overtook China to become India’s largest trading partner country. This trading partnership reflects the strong economic ties between the two countries. In such a situation, if there is a slowdown in the US economy, then it will have a direct effect on the economy of India. According to Commerce Ministry data, the shared trade between the US and India was $119.42 billion in 2021-22, while the trade between the two countries was $80.51 billion in 2020-21.
