Do More With Reuters
Partner Services

UPDATE 1-Global crisis to hit India economy more in 2009-WEF

Fri Nov 14, 2008 5:25pm IST
 
Email | Print | | Single Page
[-] Text [+]

(Recast with growth forecast, official's comment)

NEW DELHI, Nov 14 (Reuters) - Indian economy is likely to expand by 7.4-7.8 percent during 2008/09 fiscal year, slower than 9 percent of last year, as credit crunch and global downturn trims growth, industry bodies said on Friday.

The World Economic Forum (WEF) and Confederation of Indian Industry said in a report the global downturn will pressurise the economy more next year and the government has to speed up reforms and boost investment to sustain high growth rates.

"There is a pressure on bottomlines (of companies). Production is down. We do see economic growth moderating to 7.4-7.8 percent this fiscal," CII director general, Chandrajit Banerjee told a joint news conference with WEF.

"Since inflation is down, we expect more fiscal and monetary measures to give a momemtum to growth. The government should increase expenditure in infrastructure sector and put on-going projects on the fast track," he said, but dispelled fears of large-scale lay-offs by companies.

CAPITAL OUTFLOWS A WORRY

The WEF-CII report, released ahead of the India Economic Summit starting Nov. 16, also said India could see a sharp outflow of capital, and a fall in share and asset prices due to the global financial crisis.

"India's dependence on capital flows to finance its current account deficit is a macroeconomic risk and the global crisis could generate a sharp increase in capital outflows and a reduction in the availability of finance," it said.

The global credit crisis has rattled Indian markets as foreign investors sold shares worth more than $12.5 billion so far this year while the rupee fell by more than 20 percent.  Continued...

Dubai Debt Fears

Villas are seen on the The Palm, Jumeirah, with Atlantis, The Palm, under construction on the breakwater (crescent), May 3, 2008.  REUTERS/Jumana El Heloueh

Banks outside the Gulf played down their exposure to Dubai debt, after fears the emirate could default and even derail world economic recovery prompted a sell-off in global markets.  Full Article | Slideshow 

India Investment Summit 2009
India Investment Summit 2009

Top executives and bankers discuss their own plans and the broader opportunities and challenges for India.  Full Coverage 

People stroll outside the Taj Mahal hotel ahead of the first anniversary of the militant attacks in Mumbai, November 24, 2009.  REUTERS/Punit Paranjpe
Investors worry about another attack

The risk of militants striking again worries investors who fear that a second attack similar to last year's Mumbai raids could shake the economy.  Full Article | Full Coverage 

Market Update

  • IndiaIndia
  • USUS
  • UKUK
  • Asia
  • Most Actives

road to Copenhagen

BLOGS

Photo
Calculated Move

Reliance aims big with $12 bln bid for LyondellBasell.  Blog 

SHOWCASE

Capital Raising
Capital Raising

Analysis - China banks' rush for billions could trip markets.  Full Article 

 
Photo
Bonus Payout

"Bonus" has become a dirty word on Wall Street.  Full Article 

 
Bubble trouble?
Bubble trouble?

With the BSE Sensex at around 17,000 points, are the Indian equity markets looking at a possible bubble?   Commentary 

 
Funding Blues
Funding Blues

A popular tactic used by Indian brokerages to raise money for rich clients is likely to be banned.  Full Article 

 
Recovery Path
Recovery Path

Indian techie logging out of downturn gloom.  Full Article 

 
Central Banks Cautious
Central Banks Cautious

Reuters tracks the policies of the world's top central banks as the debate over global economic recovery rages on.   Full Coverage 

 
Risky Proposal
Risky Proposal

Rupert Murdoch courts trouble if he blocks Google on news.  Full Article