The Hindu Business Line : IMF-Bank meet

With reference to the IMF meeting in Dubai, it might be emphasised that the RBI Governor, Mr Y. V. Reddy, the leader of the Indian delegation, boldly indicated the implicit lack of confidence of the emerging market economies in the current international financial architecture, citing the sound initiatives and policy actions that went into building up the forex reserves of some emerging market economies.

Some economic signals that a serious investor might note from the current IMF-Bank meet are:

The long-term potential growth of the US economy is estimated at around 3.2 per cent. The US growth forecast for 2003 is 2.6 per cent, and that for 2004, 3.9 per cent. On the two-year average, US growth might touch the long-term potential. However, the growth dynamics is not so employment-oriented, and might thus have less impact on consumption

The Japan growth forecast for 2003 and 2004 is around 2 per cent and 1.4 per cent respectively.

The Euro area growth forecast for 2003 is 0.5 per cent, and 2004, 1.9 per cent

China's growth forecast is 7.5 per cent for both 2003 and 2004

India's growth forecast is 5.6 per cent for 2003, and 5.9 per cent for 2004.

If fundamentals played any role for economic signalling, the dollar economy's recovery deserves to be factored in with confidence for any medium-term investment decision in India now.

T. K. Chakrabarty

Mumbai

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

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