India’s digital finance is world’s best, says Nobel laureate Michael Spence

Nobel laureate Michael Spence said India has the world's best digital financial setup and is positioned for strong growth, while warning that high global debt and market concentration could trigger a major financial shock. Spence told The Economic Times that extensive infrastructure is being financed through debt rather than equity, leaving systems vulnerable to sudden shifts in investor sentiment. He noted that interest rate hikes by the US Federal Reserve are driving up the dollar, exerting inflationary pressures on emerging markets. Spence described India as a "rapidly rising middle-income country" with a domestic consumption engine accounting for roughly 65% of GDP, compared to China's 40%. He predicted India will become a major player in artificial intelligence within a decade as per capita income rises.