Emerging market economies, including India are likely to give the much needed support to the ongoing recovery process as employment and domestic consumption in these countries have picked up momentum rendering sustainability.
“India, along with countries like China and Indonesia, have demonstrated resilience to global financial crisis this time around and emerging markets are likely to continue to lead the recovery,” Religare Capital Markets Economist and Vice-President Jay Shankar, said.
Though emerging markets would lead the recovery process, a risk of a “double dip” looms large for the global economies, Mr. Shankar said.
“The global recovery will be sluggish through 2010, with lurking risks of a double dip. It will be a saucer shaped recovery, with multiple local minimas and maximas,” he said.
Growth in emerging markets is likely to be “differentiated and spotty” depending on existing and emerging fundamentals of individual economies.
Financial services firm Religare Hichens Harrison said in a research report that emerging market economies are in a better position to lead the recovery as the “improved macro environment in the decade preceding the crisis cushioned the emerging markets.”
Better fiscal health allowed emerging markets to deploy counter cyclical policies, helping boost domestic demand to compensate for the decline in the one from overseas.