PM confident of 8-9% growth despite crisis

PM confident of 8-9% growth despite crisis
The Financial Express, Fe Investor, July 12, 2009, Page 1

Press Trust of India

On Board PM’s Aircraft Prime Minister Manmohan Singh on Saturday said he was confident that India would be able to sustain a growth rate of 8 to 9% this fiscal and come out of the current crisis stronger.

He, however, warned that the road ahead was going to be difficult. “It is not going to be easy but I am convinced that India’s savings rate, which is as high as 35% with a normal capital output ratio of 4:1, we should be able to sustain, with a little bit effort, a growth rate of about 8 to 9% notwithstanding the difficulties on the international front,” Singh told reporters accompanying him on his way back home from a four-day visit to Italy.

Against the backdrop of the world attempting a recovery from the recession caused by the financial crisis in the heart of the developed world, the Prime Minister said he had discussions with the leaders of G-8 and G-5, Egypt and African countries and “while there are some signs of recovery, the world economy is still a long way from recovering the earlier growth momentum and there must be questions whether that will soon be possible for the global economy”.

He said in his statement at the G-8 summit, he mentioned that all available indicators for 2009 pointed to a deceleration in the US economy and the EU economies, which would affect the global environment for the development of the third world countries. “(However) I am confident that our domestic economic strengths will enable us to return to our earlier path of rapid and inclusive growth,” he added.