Early Days To Cheer Recovery (08-Mar-2010)
Commerce and Industry Minister Anand Sharma said that it is too early to rejoice over the economic recovery as it is based on worldwide stimulus packages.
He also said that the policy makers need to tread cautiously.
He added that he is doubtful to say that the world economy has come out of recession as the recovery they are seeing is stimulus-led.
However, the said that there is a need for caution and calibrated approach.
The global economy has recently shown signs of revival from the worst recession in the last 60 years.
As per the International Monetary Fund, the world economy is expected to expand by 3.9% in 2010, followed by 4.3% in 2011.
The recession-hit world economy had declined by 0.8% in 2009.
On the other hand, the economic crisis has brought the issue of protectionism into focus and they have to guard against this.
Earlier, it was said that a survey of senior executives at nearly 900 major companies worldwide has revealed that the corporate world is still anxious about economic revival,.
More than 50 C-suite executives of major corporations in West Asia and Africa took part in the study conducted by global consultancy firm Ernst & Young.
That survey revealed over half 53% of the companies agreed that surviving 2010 would still remain a challenge compared to nearly 3 quarters who had said they were focused on securing the survival of their present business last year.
Previously, Mr. Pranab Mukherjee, Finance Minister of India has said the country''s economic growth will recover in the Q-4 of the current financial year. The GDP growth of India which inched down to 6% in the Q-3 was mainly due to the negative agriculture growth by more than 2%.
Mr. Mukherjee said that he is certain that the country can pick up the GDP growth in the Q-4 and would register a growth of 7.2% by the end of the current financial year.
Mr. Mukherjee said the economic recovery is still not wide-ranging and continues to be driven by largely government spending
Moreover, Moody''s said that emerging market economies having large domestic markets and enough savings will continue to power the global economic recovery in 2010.
The economic revival is led by policy-driven domestic demand in the emerging economies of Asia and Latin America.
For the first time in modern history, the developing world, particularly China, India and Brazil has supplanted the US in leading the world out of recession.
Meanwhile, it was said that in order to facilitate recovery in the economy hit by global crisis, the government should continue with the fiscal stimulus packages in the medium term.
Noting that stimulus packages in the past have helped India Inc face the downturn, it is said that due to improving business confidence, corporates are now back with major projects.
If companies are in a better position today in spite of the slowdown that is due to the investments done in the past while investments in the capacity expansion plans should continue in the same pace.
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