The Hindu : National : U.S. crisis will hit India’s capacity: PM

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Wednesday, Oct 01, 2008
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U.S. crisis will hit India’s capacity: PM

PARIS: Apprehending that the financial crisis in U.S. may hit India, Prime Minister Manmohan Singh has said the nation’s capacity to finance development will be affected and exports compromised if major economies go into recession.

Dr. Singh, who is on a two-day visit to France, said the crisis affecting the developed countries at the moment could spread to the rest of the world and wanted India and China to be part of the solution-finding exercise.

“Our value markets are opened to the world and, if they are affected, this will affect our capacity to finance our development,” he said in an interview to leading French daily Le Figaro.

“If the financial crisis causes a recession in the main economies, this will compromise our exports.”

He also touched on the issue during his address to the Indo-EU Business Summit.

“The global economy faces uncertain times. The crisis in the financial markets has cast its shadow on global liquidity,” he said hinting that the financial crisis together with spurt in oil prices may spoil economic growth prospects in developing countries like India.

“It is unfortunate that just as many developing countries were beginning to benefit from the positive potential of globalisation, the tide has turned and the economic prospects have deteriorated,” he said.

“I emphasise the urgent need to restore confidence in the functioning of international financial markets and in the collective ability to coordinate macro economic policy in the major economies in a manner conducive to the restoration of global growth.” — PTI

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