S&P Global Ratings Chief Economist Paul Gruenwald on the Global Economy and India's Potential
In a recent interview, S&P Global Ratings Chief Economist Paul Gruenwald discussed the state of the global economy, the impact of tariffs, and India's economic growth. He highlighted the shifting narrative from tariffs and growth risks to upside risks from data centers and a capex boom, while acknowledging lingering policy uncertainty in the US.
On the tariffs, Gruenwald noted that economists initially overestimated their impact due to higher expected rates, retaliation from other countries, and the assumption that businesses would pass on costs to consumers. However, the effective tariff rate in the US ended up at around 17%, with most countries accepting the tariffs as a cost of doing business. China was an exception, but the overall impact has been less severe than anticipated.
Regarding the Indian economy, Gruenwald emphasized the country's advantage as a relatively closed economy, less dependent on the US. He suggested that this is part of a broader trend away from the Washington consensus, with many countries, including India, reassessing their international relations and managing risks. India's strong economic growth and its position as the fastest-growing major emerging market make it an attractive investment opportunity.
Despite the current uncertainty, Gruenwald expressed optimism about India's future, highlighting its potential for sustained growth and the benefits of diversifying trade and investment exposure. He concluded by encouraging investors to consider India's long-term prospects and the potential for a bright future.
