Special Correspondent

Three-day ‘India Economic Summit’ from November 16

IMF scales down growth outlook

Global crisis wipes off $57 billion

NEW DELHI: Stating that shrinking global economic growth could pose challenge for the Indian economy through further fall in share and asset prices, the World Economic Forum has warned that India still remained vulnerable to the vagaries of the world currency, commodity and financial markets.

The Geneva-based World Economic Forum will kick off a three-day “India Economic Summit” in collaboration with Confederation of Indian Industry (CII) here from November 16 amid fears of recession in major economies of the world and slowdown in growth. In its “India@Risk” report released on the eve of the summit, the Forum states that in the long-run, all the indicators of Indian economy point to sustainability of growth rates quoting International Monetary Fund (IMF) projections of 7.9 per cent and 6.9 per cent respectively for 2008 and 2009. IMF, since, has further scaled down Indian economic growth outlook to 7.8 per cent and 6.3 per cent for these two years.

With the impact of global financial crisis on India still unfolding, share and asset prices in general as well as balance sheet of financial institutions could decline further, says World Economic Forum.

Talking to mediapersons here, CII Director General, Charanjeet Banerjee, W. Lee Howell, Senior Director, Head of Global Agenda, senior advisor on Asia World Economic Forum, and Mark Adams, Managing Director, head of Communications and Media, said many sectors were moderating in view of the world economic scenario. The confidence had diminished and it was all the more important that this forum took up the challenge in right earnest and work for solutions with global outlook.

The WEF report said the crisis would also affect remittances to the country as most of them come from the U.S. and Canada. Already, the crisis has wiped off around $57 billion from the Indian economy for the first seven months of this fiscal, according to the latest figures from the Reserve Bank of India. Industrial growth partly rebounded to 4.8 per cent in September after a dismal 1.4 per cent in August, but analysts fear that October onwards, it would again fall drastically. The WEF report said sluggish demand from developing economies might affect Indian exports in the coming quarters. Even though it said that Indian exports for 2007-08 exceeded $155 billion, the latest figures showed that exports fell by 15 per cent in October. Stressing on the growth of agriculture, the report pointed out that the economic growth of the country was not benefiting the rural population.