India’s and Japan’s growing economies benefit the UAE

According to expert economists, the United Arab Emirate (UAE) will benefit greatly by the steadily growing and expanding Japanese and Indian economies.

India’s fast yet steadily growing economy is expected to translate into increased trade amongst the UAE and India. Part of India’s economic plan and vision is to develop its energy manufacturing businesses and activities. While in the development process, India’s demand for energy will lead to an accelerated growth rate for the entire economy.

Japan’s overall positive economic growth will potentially lead to increased demand of imports such as oil and gas. Additionally, new competitiveness amongst Japanese-made goods for exports will lead to increased demand for their manufactured goods, which will also increase the price of goods at competitive levels. This will facilitate Japan to restrain inflation rates.

It is anticipated that India’s economic growth will reach 6.3% during the following year, based on the UN World Economic Situation and Prospects 2015 (WESP) report which was conducted recently. The expected increased growth rate will be the highest the Indian economy will have reached since 2008–2011, whereby the economy had marked an impressive 7.3% economic growth rate before decelerating in 2012, dropping to below 5%.

The political structure and system in India is known for its diversification and strength, which has helped the nation follow and develop a variety of government-related activities. India’s political system is distinct, as the government entities do not move and develop at the same pace as one, but rather as a complex of a variety of entities that develop and grow at different rates and paces.

India’s states have modernized and updated their bureaucracy procedures, simplified and elucidated property rights as well as gotten rid of prolonged regulatory impediments and obstacles in order to accomplish economic growth. As these governmental entities move forward and succeed in sustaining growth rates, it is anticipated that the entire country will benefit from its economic growth.

On the other hand, India must take into consideration the fact that it is still a new developing economy, making it vulnerable to other more dominant and strong forces. International investment flows often fluctuate, at times investments are high while at times they plunge. India’s main source of economic growth derives from investments.

The recent WESP report showed that the global economy is anticipated to grow by a rate of 3.1% and 3.3% during 2015 and 2016 respectively. Based on these statistics, the global economy will benefit from a rise in economic growth of 0.5% when compared to the 2.6% growth rate recorded in 2014. What’s more, inflation rates throughout the Middle East will remain at the same levels, approximately 23% over 2015 and 2016.

Japan’s impressive comeback has been highlighted recently, as it seems that the country is recovering or rather moving away from its ten-year slow-paced period. Regardless of this fact, it is important to mention that Japan still has a rather massive sovereign debt. Even though Japan has remained behind in terms of economic growth over the past decades, the country is still considered as rich, fruitful and productive as its productivity growth matches other developed and leading economies.

The equilibrium amongst net producers and net consumers is moving towards consumers at the moment, making it an ideal time for Japan to move beyond the deflationary situation it has been in over the past years.

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