<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published June 5, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>India could beat rest of region: Roach
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(MUMBAI) Stephen Roach, chairman of Morgan Stanley Asia, is more optimistic about economic growth prospects in India than China, saying the country may outperform others in the Asia-Pacific region.
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</TD></TR><TR class=caption><TD>Mr Roach: 'India is a more balanced economy than the rest of export-led Asia' </TD></TR></TBODY></TABLE>'India is a more balanced economy than the rest of export-led Asia,' Mr Roach told reporters here on Wednesday. 'India could actually outperform at the margin the rest of the region.'
The country's benchmark stock index has climbed 22 per cent since the May 16 re-election of Prime Minister Manmohan Singh's government without the need of support from the communist parties, which had blocked economic reforms during the previous term.
'The recent election changes the prospects for reforms,' Mr Roach said. 'What has been missing in this interplay between the micro and the macro has been the political impetus to reforms.'
The Indian economy stabilised in the first quarter, maintaining the 5.8 per cent pace of expansion recorded in the preceding three months. Growth in China's gross domestic product (GDP) slowed to 6.1 per cent from 6.8 per cent in the same period, owing to the dependence on overseas sales.
'China faces major challenges for the first time in 30 years,' Mr Roach said. 'It pushed its export-led model too far, leaving it too dependent on the external climate.'
Morgan Stanley on May 28 raised India's growth forecast to 5.8 per cent in the fiscal year to March 31, 2010, from an earlier estimate of 4.4 per cent.
Economic growth in the US$1.2 trillion economy may turn out to be the real surprise in Asia, Mr Roach said.
Six interest-rate cuts in seven months and fiscal stimulus measures are providing the nation with a boost worth almost 7 per cent of GDP, according to the central bank.
The Reserve Bank of India (RBI) forecasts the economy will grow 6 per cent in the fiscal year that started April 1, compared with average growth of 8.5 per cent in the previous five years. India's fiscal year runs from April 1 to March 31.
The economy won't get back to an 8 per cent pace of growth for two years, Mr Roach said. Selling stakes in state-run companies is important for the nation to reduce its fiscal deficit, he added.
India's fiscal deficit widened to a seven-year high of 6.2 per cent in the fiscal year to March 31, 2009 as the government borrowed more to fund fiscal stimulus packages. -- Bloomberg
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>India could beat rest of region: Roach
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(MUMBAI) Stephen Roach, chairman of Morgan Stanley Asia, is more optimistic about economic growth prospects in India than China, saying the country may outperform others in the Asia-Pacific region.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Roach: 'India is a more balanced economy than the rest of export-led Asia' </TD></TR></TBODY></TABLE>'India is a more balanced economy than the rest of export-led Asia,' Mr Roach told reporters here on Wednesday. 'India could actually outperform at the margin the rest of the region.'The country's benchmark stock index has climbed 22 per cent since the May 16 re-election of Prime Minister Manmohan Singh's government without the need of support from the communist parties, which had blocked economic reforms during the previous term.
'The recent election changes the prospects for reforms,' Mr Roach said. 'What has been missing in this interplay between the micro and the macro has been the political impetus to reforms.'
The Indian economy stabilised in the first quarter, maintaining the 5.8 per cent pace of expansion recorded in the preceding three months. Growth in China's gross domestic product (GDP) slowed to 6.1 per cent from 6.8 per cent in the same period, owing to the dependence on overseas sales.
'China faces major challenges for the first time in 30 years,' Mr Roach said. 'It pushed its export-led model too far, leaving it too dependent on the external climate.'
Morgan Stanley on May 28 raised India's growth forecast to 5.8 per cent in the fiscal year to March 31, 2010, from an earlier estimate of 4.4 per cent.
Economic growth in the US$1.2 trillion economy may turn out to be the real surprise in Asia, Mr Roach said.
Six interest-rate cuts in seven months and fiscal stimulus measures are providing the nation with a boost worth almost 7 per cent of GDP, according to the central bank.
The Reserve Bank of India (RBI) forecasts the economy will grow 6 per cent in the fiscal year that started April 1, compared with average growth of 8.5 per cent in the previous five years. India's fiscal year runs from April 1 to March 31.
The economy won't get back to an 8 per cent pace of growth for two years, Mr Roach said. Selling stakes in state-run companies is important for the nation to reduce its fiscal deficit, he added.
India's fiscal deficit widened to a seven-year high of 6.2 per cent in the fiscal year to March 31, 2009 as the government borrowed more to fund fiscal stimulus packages. -- Bloomberg
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