Prime Minister Manmohan Singh said while he was addressing the Group of 20 meeting in Washington, there is a need to take urgent steps to strengthen the global trading system and forestall any protectionist tendencies which always surface in times of recession. We are meeting at a time of exceptional difficulty for the world economy. The financial crisis, which a year ago seemed to be localized in one part of the financial system in the US, has exploded into a systemic crisis, spreading through.
The highly interconnected financial markets of industrialized countries, and has had its effects on other markets also. It has choked normal credit channels, triggered a worldwide collapse in stock markets around the world. The real economy is clearly affected. Industrialized countries were expected to slow down in 2008. They are now projected to be in a recession in the second half of the year, and there is as yet little prospect of an early recovery. Many have called it the most serious crisis since the Great Depression.
India is experiencing this negative impact. After growing around 9 per cent per year for four years, our growth rate is expected to slow down to between 7 per cent to 7.5 per cent in the current financial year. The pace of growth next year will depend, in part, upon how long the global recession lasts and how quickly global capital flows return to normal. India''s growth is mostly internally driven and can maintain a strong pace of growth in the coming years, though many developing countries will be hit harder.
A slowing down of growth in developing countries will push millions of people back into poverty, with adverse effects on nutrition, health and education levels. These are not transient impacts but will impact a full generation. If we are to prevent a slide back and ensure that Millennium Development Goals are achieved, we need to ensure that growth in developing economies is not affected.
The highly interconnected financial markets of industrialized countries, and has had its effects on other markets also. It has choked normal credit channels, triggered a worldwide collapse in stock markets around the world. The real economy is clearly affected. Industrialized countries were expected to slow down in 2008. They are now projected to be in a recession in the second half of the year, and there is as yet little prospect of an early recovery. Many have called it the most serious crisis since the Great Depression.
India is experiencing this negative impact. After growing around 9 per cent per year for four years, our growth rate is expected to slow down to between 7 per cent to 7.5 per cent in the current financial year. The pace of growth next year will depend, in part, upon how long the global recession lasts and how quickly global capital flows return to normal. India''s growth is mostly internally driven and can maintain a strong pace of growth in the coming years, though many developing countries will be hit harder.
A slowing down of growth in developing countries will push millions of people back into poverty, with adverse effects on nutrition, health and education levels. These are not transient impacts but will impact a full generation. If we are to prevent a slide back and ensure that Millennium Development Goals are achieved, we need to ensure that growth in developing economies is not affected.
No comments:
Post a Comment