Europe faced potential fall behind in pace compared to India
In the ever-evolving global landscape, several economies are forecasted to expand and strengthen their partnerships in the coming years. Here's a snapshot of some notable developments.
The European Union (EU) has projected a modest expansion ahead, with its GDP expected to rise by 1.1% over 2025. Despite a slow growth, the EU's economy is expanding, with GDP growing by 0.7% in the euro area and 0.8% across the EU in 2024, according to the latest European Commission figures.
Meanwhile, India's economy is showing signs of a robust recovery. In the April to June quarter alone, GDP grew by 7.8% year-on-year, and the country is expected to expand by 6.5% in the fiscal year ending March 2025. This growth is attracting global attention, with Japan, for instance, viewing India as the first destination for Japanese companies due to its market and manufacturing growth.
The political consensus within the EU emphasizes strengthening trade and economic partnerships beyond the transatlantic area. This includes pursuing new trade agreements and collaborations with strategic partners like India, while also prioritizing sustainable development and international stability. Germany, in particular, is focusing on opening concrete opportunities with global partners outside the transatlantic space.
India's economic growth is not going unnoticed by its neighbours either. The Japanese and Indian governments aim to expand exchanges of workers and students to half a million within five years, with Japan looking to India's young workforce to help offset its own labor shortages.
India's economic potential is not limited to its borders. Prime Minister Narendra Modi called the combination of Japanese technology and Indian manufacturing a 'winning combination', and Japanese Prime Minister Shigeru Ishiba and Modi agreed to raise Japanese private investment in India to around $6.8 billion annually over the next decade.
Elsewhere, the BRICS (Brazil, Russia, India, China, South Africa) are strengthening their cooperation to defend multilateral trade 'in the face of unilateral bullying resurfacing'. The BRICS began holding summits in 2006 to work together on global economic issues, and South Africa joined the group in 2010.
However, cautionary notes have been raised. Suman Bery, vice chair of the Indian Government body for economic strategies, warned Europe not to follow the same path it did with China, emphasizing the importance of preserving liberal democratic values and global governance structures.
Bery's warning came just after India took part in a summit with China, Russia, and other emerging powers. The creation of the BRICS was seen as a response to perceiving other parties as a 'spare tyre' or 'fifth wheel', and Bery questioned whether Europe has learned from what happened with China and if there is a political consensus for growth and expansion.
In conclusion, the global economy is witnessing a shift towards strategic partnerships and expanding economies. As these trends continue, it will be interesting to see how these partnerships evolve and what impact they will have on the global economy.
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