India’s innovation-led growth offers long-term optimism despite global turmoil: WIPO Economist

Dalian (China), June 23 (IANS) Despite rising geopolitical tensions and economic disruptions triggered by conflicts in the Middle East, India’s long-term economic prospects remain positive, driven by its growing innovation ecosystem and strong economic fundamentals, Carsten Fink, Chief Economist at the World Intellectual Property Organisation (WIPO) said on Tuesday.

Speaking to IANS on the sidelines of World Economic Forum’s Annual Meeting of the New Champions — known as Summer Davos — Fink said the Middle East crisis has affected the global economy primarily through higher commodity prices, particularly crude oil, while also pushing up the prices of other essential commodities such as fertilisers.

“I think in the short term, the Indian economy is quite affected by the crisis and I think that has to do with the fact that the Indian economy is quite oil dependent. But we like a lot what is happening to India’s innovation landscape where there’s a lot of dynamism, you know, where essentially the economy is growing at rates that, you know, few other middle income economies currently observe and where you see, you know, sort of long term innovative capacity being created,” he said.

He noted that despite these shocks, the world economy has demonstrated considerable resilience. However, he cautioned that the economic outlook for the coming months would largely depend on developments in the Middle East, particularly the movement of traffic through the Strait of Hormuz and its impact on commodity prices.

“The world economy has been reasonably resilient despite this shock,” Fink said, adding that the trajectory of inflation and the response of central banks across different countries would play a crucial role in determining the short- and medium-term path of the global economy.

Fink also praised the India’s growing innovative capacity, saying that long-term foundations for sustainable growth are being created through innovation and technological advancement.

“In the short run, certainly the Indian economy faces challenges. But in the long run, there are reasons to be quite optimistic,” he said.

–IANS

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