PM Modi recalls Fragile Five tag at Independence Day speech

Prime Minister Narendra Modi on Saturday recalled that India was once labelled one of the world's 'Fragile Five' economies. Speaking from the ramparts of the Red Fort on the 80th Independence Day, he said the country's economic picture has changed vastly in the past 12 years, and India is now among the fastest-growing major economies.

The term 'Fragile Five' was coined in 2013 by global investment bank Morgan Stanley for five emerging economies vulnerable to external financial shocks: India, Brazil, Indonesia, South Africa and Turkey. At the time, India faced high inflation, a widening current account deficit, a falling rupee, and heavy dependence on foreign capital, partly due to the US Federal Reserve's gradual withdrawal of quantitative easing. The current account deficit touched 5.1 per cent of GDP in 2012, and the rupee fell about 12 per cent against the dollar within months.

India exited the Fragile Five group in 2014 as its external financial balance improved and forex reserves strengthened. The IMF noted that India had achieved the fastest macroeconomic turnaround among emerging economies. Experts credited then-RBI governor Raghuram Rajan and government steps such as curbs on gold imports and export promotion for the recovery. Last year, India surpassed Japan to become the world's fourth-largest economy, behind only the US, China and Germany.