Global slowdown to dampen foreign trade prospects
It says, “The outlook for exports in 2008-09 may not be as bright as in the past few years,” and adds, “the direct impact of the global growth slowdown is on the demand for imports.”
The survey has also said that the India’s slower economic growth in 2007-08, as against the previous two fiscals, might have a temporary dampening effect on capital inflows. In April-December 2007, the exports grew by 21.6% to $111 billion. However, in rupee terms, the growth was just 7.7%. Due to the global slowdown, it is unlikely to reach the $160 billion target for 2007-08.
Rupee has appreciated by over 13% against the US dollar in 12 months to December 2007, affecting the export sector’s competitiveness.
Rajiv Kumar, director and chief executive, ICRIER, said, “The cost of sterilisation (RBI's intervention to ease the impact of rupee appreciation), which stands at Rs 8,200 crore, can be enhanced if needed to prevent rising of the rupee at any point of time. This will give a clear signal to the exporters that their profitability will be maintained.”
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