Economy to bounce back, 9% growth within 6 mths: Mohan
The Financial Express, May 12, 2009, Page 2
fe Bureau, Mumbai
Unwinding of monetary as well as the fiscal policy would happen only after the global economy gets rekindled, says RBI deputy governor Rakesh Mohan.
“It is obviously the case that given the kind of expansion that has taken place in the balance sheets in some of the most significant Central banks of the world, unwinding would be done when needed,” he said on the sidelines of 101st annual general meeting of the Indian Merchants Chamber in Mumbai on Monday.
Mohan who predicted that India is likely to bounce back to 9% growth within six months time, said the speed of the downturn of the global economy has been arrested although the global economy is not yet witnessing an upturn.
One of the on-going consequences of the current crises will be that a great deal of re-thinking would happen within governments and Central banks as to how monetary policies ought be conducted, how financial sector regulations should be done, how these two are related etc.
Responding to the media criticism on his `alleged conservative attitude’ while framing the policies in the RBI , he said, “It’s to be noted that doing reform in the country’s real sector is far different than pursuing reforms in the sensitive financial services sector. It’s good to sacrifice some of the ardent reformative approaches many a times in the interest of the nation.” Mohan said
Listing the lessons, the world needs to learn from the recent downturn, he said, “We should now avoid high volatility in monetary policies and take appropriate response of monetary policy to asset prices. One has to manage capital flow volatility, look for signs of over leveraging and go for active dynamic financial regulations. Also, one has to actively look for regulatory arbitrage incentives or possibilities.’’
Commenting on his resignation from the Central bank, he said, “I receive an offer from the American University that I could not refuse. Every one has to have a time to retire and so I did.”
Shankar Acharya, honorary professor, Indian Council for Research on International Economic Relations said that the current fiscal would be a bad year for India. the slow and painful recovery would happen after 2010 probably. In this fiscal, the country would grow at 5-6% and 7-8% growth is likely in medium to longer run.
The Financial Express, May 12, 2009, Page 2
fe Bureau, Mumbai
Unwinding of monetary as well as the fiscal policy would happen only after the global economy gets rekindled, says RBI deputy governor Rakesh Mohan.
“It is obviously the case that given the kind of expansion that has taken place in the balance sheets in some of the most significant Central banks of the world, unwinding would be done when needed,” he said on the sidelines of 101st annual general meeting of the Indian Merchants Chamber in Mumbai on Monday.
Mohan who predicted that India is likely to bounce back to 9% growth within six months time, said the speed of the downturn of the global economy has been arrested although the global economy is not yet witnessing an upturn.
One of the on-going consequences of the current crises will be that a great deal of re-thinking would happen within governments and Central banks as to how monetary policies ought be conducted, how financial sector regulations should be done, how these two are related etc.
Responding to the media criticism on his `alleged conservative attitude’ while framing the policies in the RBI , he said, “It’s to be noted that doing reform in the country’s real sector is far different than pursuing reforms in the sensitive financial services sector. It’s good to sacrifice some of the ardent reformative approaches many a times in the interest of the nation.” Mohan said
Listing the lessons, the world needs to learn from the recent downturn, he said, “We should now avoid high volatility in monetary policies and take appropriate response of monetary policy to asset prices. One has to manage capital flow volatility, look for signs of over leveraging and go for active dynamic financial regulations. Also, one has to actively look for regulatory arbitrage incentives or possibilities.’’
Commenting on his resignation from the Central bank, he said, “I receive an offer from the American University that I could not refuse. Every one has to have a time to retire and so I did.”
Shankar Acharya, honorary professor, Indian Council for Research on International Economic Relations said that the current fiscal would be a bad year for India. the slow and painful recovery would happen after 2010 probably. In this fiscal, the country would grow at 5-6% and 7-8% growth is likely in medium to longer run.
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