By NNN-PTI,
Tokyo : The short-term outlook for Indian economy looks “cloudy” in the face of the global financial meltdown and steps are required to prevent the credit crunch from turning into a crisis of confidence, Prime Minister Manmohan Singh said.
“The short-term outlook is cloudy but I am confident that the Indian economy has the resilience to sustain its growth momentum in the medium-term… We have to prevent the liquidity crisis from becoming a crisis of confidence in the international monetary and financial system,” he said.
Singh was addressing a gathering of top Indian and Japanese business leaders here on the second day of his three-day official visit to Japan on Wednesday.
India has unleashed a host of measures, including a cut in key rates by its central bank, to increase credit flow in and the government has also announced that more steps would be taken to stimulate the economy, which is expected to post near 8 per cent growth despite the global slowdown.
The Prime Minister said the “great turbulence in the world economy” has “chocked credit flows and predictably spilled over to the stock market — which has been testing over two-year lows.
Singh, 76, an eminent economist himself, said that the global nature of the crisis calls for a coordinated global response. “Developing economies like India are affected by the crisis and have to be part of the solution.” “We hope to build on India’s many strengths as an emerging market economy that is now ready for rapid growth. Over the past four years, we have averaged nine per cent GDP growth per year.