Financial Daily from THE HINDU group of publications
Friday, Apr 02, 2004
Financial Daily from THE HINDU group of publications Friday, Apr 02, 2004 |
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Industry & Economy
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Economy `ITes, capital-led industries to lead growth in economy' Our Bureau
Mumbai , April 1 THE US Federal fund rates may go up by 0.5 per cent during this calendar year, according to Mr Stephen Roach, Chief Global Economist and Managing Director, Morgan Stanley. He, however, feels that a jump to 3 per cent from the current level of 1 per cent is necessary for economic balance in the US economy. Speaking about India, Mr Roach said that there are factors in the country that are favourable for global economists to consider investing here. "IT-enabled services (ITes) and other intellectual capital-led industries would spearhead growth in the Indian economy,'' he said. The dollar has lost 13 per cent during last year and expectations are that it would lose another 13 per cent in the coming year. The yen would be forced to take the burden of this fall, predicted Mr Roach. ``Equity markets in the US and Japan would continue to erode value, European markets would be out performers,'' he said. The price of ferrous and non-ferrous metals would drop substantially as the Chinese economy has been the largest buyer of these commodities and is not expected to continue the current levels of consumption this year. ``Even though the official growth rate of the Chinese economy has been quoted as 9.1 per cent last year, the actual rate was around 13 per cent. This will now be restricted to 7 per cent for this year, according to the indications we had with the Chinese administrators during our discussions last week,'' he said.
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