Indian economy cushioned by domestic consumption against global slowdown: Ajay Banga

India gets a lot of its GDP from domestic consumption. So even if the world would slowdown for a few months, India has a natural cushion by the fact that it is more domestic consumption oriented, said Banga

New Delhi: Domestic consumption provides natural cushion to the Indian economy against the global slowdown as bulk of the country’s GDP depends on local demand, said World Bank President Ajay Banga here on Wednesday.

Talking to reporters after meeting Union Finance Minister Nirmala Sitharaman, Banga said he discussed issues related to G20 and cooperation between the World Bank and India.

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“We talked about everything we did at G20 and how the meeting went. We talked about what the world bank and India can do further as well as G20 part of it. India is the largest market for the World Bank in terms of our portfolio here. There is a lot of interest here,” he said.

On world economy outlook, the World Bank President said there is more risk on the downside in terms of a slowdown in the early part of next year.

However, he said, “India gets a lot of its GDP from domestic consumption. So even if the world would slowdown for a few months, India has a natural cushion by the fact that it is more domestic consumption oriented.” India-born Banga is here to attend the meetings of the G20 being held under India’s presidency.

With regard to outlook on world economy, he said, “I think we did better than we all thought. But I still feel that there’s more risk on the downside in terms of a slowdown over the early part of next year. As I said, in the G20, meeting, forecasts are not destiny and so you shouldn’t just think that the forecast is right. Think about what can be done.”

Banga, 63, took over as the president of the World Bank last month, becoming the first person of colour to head either of the two global financial institutions — the World Bank and the International Monetary Fund.

Banga is on his first visit to India after taking over the charge of the global lender.