C P Chandrasekhar & Jayati Ghosh

As the global economic situation worsens, there are renewed concerns about the fate of developing countries, and hopes are being expressed that developing Asia will avoid the coming slump. In this edition of MacroScan, C. P. Chandrasekhar and Jayati Ghosh consider recent trends in global GDP growth, investment and trade, and the prospects for developing Asia.

Fears are being expressed in official policy circles that the country's dependence on foreign debt, as opposed to foreign investment, to finance the external deficit is increasing, leading to specific policy responses. C.P. Chandrasekhar and Jayati Ghosh examine these fears and assess the responses.

This July marked the completion of two decades after India experienced the balance of payments crisis of 1991. With substantial reserves, the external situation today appears and is different. But there are similarities as well.

The Assembly elections in West Bengal have resulted in the defeat of the Left Front government after 34 years in power. This edition of MacroScan examines votes polled to see whether this actually reflects a big decline in popular support for the Left in the State.

Global food prices are spiking once again, creating fears of a renewal or intensification of the global food crisis. How much this affects developing countries depends on the responsiveness of domestic prices to global trade prices. An analysis of recent patterns of food price changes in some countries of Asia helps assess the implications.

While assessments vary in their detail, the consensus is that the recession that began in December 2007 and lasted 18 months has now, finally, been followed by recovery. The basis for such optimism is not, however, robust.

Persisting high inflation points to the failure of the Government to properly recognise and attempt to address structural tendencies and adopt appropriate short-term measures.