Domestic Macro Fundamentals In a dynamic international environment fraught with high uncertainty and elevated perceptions of risk, it is ultimately the strength and resilience of the macroeconomic fundamentals that will determine our ability to manage external shocks. It is useful in this context to draw lessons from the 2013 experience.
In 2009, India was among the first nations to bounce back from the global financial crisis on the wings of fiscal and monetary stimulus. Aspirations about India’s underlying potential seemed within reach. History would, however, ordain otherwise. With the gradual unwinding of the stimulus, the economy lost steam.