Economic crisis, terrorism threaten to blow India off course | The Daily Star
12:00 AM, February 18, 2009 / LAST MODIFIED: 12:00 AM, February 18, 2009

Economic crisis, terrorism threaten to blow India off course

The global economic crisis and the threat of terrorism have combined to deliver a rude awakening to India's dream of continued peace and prosperity after successive years of sustained growth.
A meeting last week in New Delhi of senior politicians, CEOs, economists and academics painted a gloomy picture for the world's largest democracy, which this time last year seemed to be riding an unstoppable wave of optimism.
"We are not insulated nor immune" from the dangers posed by the financial meltdown and terrorism, Commerce and Industry Minister Kamal Nath told the meeting.
"As far as the world economy is concerned, it will sink even further. Of course there is going to be an impact on (Indian) exports because of the contraction of the demand in the US and in Europe," Nath said.
The government expects growth to slacken this year to 7.1 percent -- the weakest in six years -- and economists say it could slow further, to 5.5 percent the following year.
"India is already suffering from the slowdown of the global economy," said Richard Heald, vice-chairman of Rothschild India.
India had planned on realising an export target of 200 billion dollars this year, but the final figure is expected to be closer to 175 billion dollars.
While India's economy is less export-driven than those of China and Southeast Asia, Omkar Goswami, founder and chairman of the Corporate and Economic Research Group, said relying on the domestic market to see it through the crisis was unrealistic.
"Do not underestimate the depth of this recession in the US, euro zone, UK or Japan," Goswami said.
"Do not say it is hardly going to hit India. It's already hurting employment and investments."

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