Tensions with Pak won't affect India's rapid growth: WEF
The geopolitical tension in the South Asian region will not have any adverse impact on economies like India and it will continue to experience "quick rapid growth", World Economic Forum said today.
On the impact of continuing geopolitical tension between India and Pakistan on the economy, Chief Economist and Member of the Executive Committee of World Economic Forum Jennifer Blanke said the region will continue to have "quite rapid growth" adding, "Certainly I have not seen any re-assessment downward to that".
She was addressing a press conference on the two-day India Economic Summit that begins on October 6.
Asked about her comment that "economies need to be competitive for the monetary policy to be effective" and the 0.25 per cent repo rate cut on Tuesday by the RBI, Blanke said the "RBI is seen as having done a really good job".
However, she said the developing and advanced economies have depended "too much" on monetary policies, adding that India needs to have very well managed monetary system.
"In order to really have sustainable growth you cannot count on things like extra bursts of extra money in the system what you need need to do is to tackle those underlying structural impediments... RBI needs to keep making sure that everyone has confidence in the system," Blanke said.
Sharing India Inc's perspective on the steps taken to combat terrorism and their impact on the economy, CII Director General Chandrajit Banerjee said, "The clarity with which the government has been responding to the geopolitical scenario which has emerged recently is extremely encouraging. The business or the economy will not get affected." "We see demand picking up. We see investments coming.
With a strong monsoon and a good agricultural bounceback we do expect good investment demand and consumption demand picking up over the course of this year and this does not get affected by the recent geopolitical happenings," Banerjee said.