Oct. 22 (Bloomberg) -- Prime Minister Manmohan Singh said the economic slowdown in India should be seen as a short-term phenomenon caused by the turmoil in the global economy, and the nation’s long-term prospects are “very good.”
“The current slowdown is a matter of concern but it should be seen as a short-term phenomenon, reflecting highly unsettled conditions in the global economy,” Singh told a gathering of policy makers in New Delhi today. “We must guard against the mood of negativism that seems to have gripped the country.”
India’s economic growth may slip to 8 percent this year from 8.5 percent last fiscal year, according to the Reserve Bank of India. The central bank has boosted the benchmark rate by 350 basis points in 12 moves since mid-March 2010 to curb inflation that has exceeded 9 percent since the start of December.
“It is our collective responsibility to reverse the mood of negativism today,” Singh said. “Nothing is ordained or pre- determined. India can rise, but can also falter. We live in a world of rising and faltering economies.”
The world economy will expand 4 percent this year and next, the International Monetary Fund said Sept. 20, compared with June forecasts of 4.3 percent in 2011 and of 4.5 percent in 2012. Concerns that the global economy may fall back into a recession have increased as Europe wrangles over a solution to the sovereign debt crisis and the recovery of the U.S. economy falters.
India is likely to emerge from the current economic crisis stronger than other nations, Singh said.
The South Asian nation aims to accelerate the pace of economic growth to 9 percent in the five years starting April 2012 to help cut poverty, Singh said on Aug. 20.
--Editor: Thomas Kutty Abraham, Jim McDonald
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