Recession unlikely to affect India: S&P

PTI

Mumbai, September 21

Global rating agency S&P on Tuesday said even though the US and the Euro zone are headed to recession, India is unlikely to face the impact given the “not so coupled” nature of its economy with the global economy.

“Indian economy is a lot decoupled from the global economy than we normally think of, given its large domestic demand, even though you (India) are a net importer of energy. But you have enough forex reserves on the one hand and your companies have managed to maintain healthy balance sheets,” Paul F Grunewald, S&P global chief economist and managing director, said.

Not so coupled economy

Indian economy is a lot decoupled from the global economy than we normally think of, given its large domestic demand, even though you (India) are a net importer of energy. —Paul F Grunewald, MD, S&P

In fact, India was never coupled fully with the global economy and so is relatively independent of global markets, he said, adding that a lot depends on how global fund flows behave if there is a recession in the US and Europe. Their inflation numbers continue to dodge the monetary actions by their central banks as the gap between the US core inflation target and the actual number is three times at 6%.

Listing out inflation and the resultant measures by the US Fed as the threat to the US economy, he said, the world’s largest economy is headed towards recession.

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