Domestic demand will help India tide over US financial crisis

August 11th, 2011 - 8:23 pm ICT by IANS  

Pranab Mukherjee New Delhi, Aug 11 (IANS) India will be able to tide over the financial crisis emanating from a probable US double dip recession and downgrade of its sovereign debt rating as the Indian economy’s growth was driven by domestic demand, Finance Minister Pranab Mukherjee said Thursday.

“It is too premature to say what will be the final shape of the US downgrade. But there is no doubt that our IT industry mad be affected,” Mukherjee said during a discussion in the Rajya Sabha.

“But I am not unnecessarily worried,” said the finance minister adding that the economy had seen worse in 2008 when exports declined for 11 months on the trot starting October 2008.

“We generated domestic demand which other economies do not have,” Mukherjee said alluding to the 6.8 percent growth India logged during the financial crisis year of 2008-09.

The finance minister, however, said exports could get hit this time around as well, if demand slowed down in the US and Europe further. Japan, US and Europe constitute a majority of the export destinations of India.

“Some export diversification has taken place. But I don’t know to what extent.”

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