With reference to news report ‘World economy faces more pain in 2023 after a gloomy year’, owing to an unprecedented surge in inflation fuelled by the Russian-Ukraine war, countries are now pinning their hopes on 2023 for an economic revival.

While there are signs of inflationary pressures easing now, there is no indication from central banks pausing on policy rate hikes.

With the Russia-Ukraine war showing no sign of abating, the massive disruptions in the supply chain of food and fuel with its devastating consequences on inflation and economic growth will continue in the upcoming year as well. The cloud of uncertainty that hovers over the global economy now does not portend well for its future.

M Jeyaram

Sholavandan (TN)

Under-pressure banks

In view of the continuing global concerns of recession and the domestic concerns of falling rupee, high retail inflation and lack of pick up in domestic demand, companies are bound to be impacted and consequently bank assets could face the issue of slippages (“Keep an eye on slippages in rejigged assets: RBI to banks”, December 28).

The RBI’s cautionary note is timely. It is impossible to insulate the economy from the global headwinds. The continuing Ukraine war and China’s Covid worries will have their impact on the businesses and economy, which could spill over to the banking sector. Hence, banks need to be extra cautious in monitoring their assets as well as in extending fresh credit.

Kosaraju Chandramouli

Hyderabad

India’s opportunities

This refers to “Global headwinds pose challenge to India’s trade prospects in 2023” (December 28). India not being an export powerhouse, the global energy crisis due to the Russia-Ukraine war and the ban imposed by Russia on oil exports to countries that impose price cap along with the existing challenges are not expected to help boost exports.

The successful conclusion of FTA with EU and and UK will lead to reduction in trade costs. India having recently assumed the presidentship of G20 bloc will further give fillip to its efforts. Rupee trade will reduce the exchange risk but its benefits are limited to Russia and Iran.

With China’s exports facing challenges due to Covid worries, it is time for India to utilise the vacuum created by China by promoting exports which help close the trade gap and stabilise the rupee which is going through a challenging phase.

Srinivasan Velamur

Chennai

Rethink on PSUs?

With reference to ‘Statistalk’ (December 28), against the backdrop of ongoing clamour for dismantlement of PSUs and the opposition criticism of the government for not meeting disinvestment targets, the comeback story was indeed counterintuitive. After neglecting BSNL for years, the government has now woken up to the need for reviving it counter the telecom duopoly. Would the rising fortunes of PSUs trigger such a rethinking in policy makers?

Manohar Alembath

Kannur

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