5:21PM BST 11
Jun 2012
India has a record trade deficit, the biggest among the Bric nations, and an
inflation rate of more than 7pc but prime minister Manmohan Singh has promised
to stimulate the economy with port, road and power plant projects.
The rupee weakened and shares tumbled after Standard & Poor's warned
that a slowdown in economic growth and the political paralysis on economic
development gripping the country carried the risk of re-rating.
Currently India's BBB- rating is just one level above junk status and the
lowest in the Bric 'club' which has Brazil, Russia and China as its other
members.
Joydeep Mukherji, a New York-based S&P analyst, said: "Setbacks or
reversals in India 's
path toward a more liberal economy could hurt its long-term growth prospects
and therefore its credit quality."
Growth in the booming Indian economy has slowed with the loss of export
business in depressed European markets while business leaders are deadlocked
with the Government over economic development plans and policy changes.
Corruption scandals have not helped India 's image while some foreign
investors say they now get a cooler reception.
Separately, Chen Deming, commerce minister, said China faced a "severe"
trade situation this year but "with luck" could still achieve a 10pc
growth in trade, well down on the 22.5pc achieved last year.
Economic growth has slowed to just over 8pc and resulted in a series of
stimulus measures including a cut in interest rates and an increase in bank
lending.
No comments:
Post a Comment