Worrying signs for Indian Incs amid US, Europe economic crisis [Nov 2011]

November 25, 2011 6:05 am

India’s growth story continues to ride on strong domestic demand but worrying signs are emerging due to Europe’s debt crisis and a faltering US recovery, according to the latest ASSOCHAM Eco Pulse study that analysed second quarter results of 87 companies across various sectors.
High interest rates have pushed up raw material costs. The demand for automotive components has declined and delays in government clearances continue to hold back fresh investments. Though exports to Europe and the United States have fallen, overall exports continue to be on upswing.
“Second quarterly results suggest healthy state of affairs currently for Indian corporates as emerging economies led by China and India continue to lead the world economic recovery. But fears of global financial contagion pulling down growth in developing countries are mounting. Global investors are taking flight for safety, causing anxiety in the markets,” said the study. According to the study, in the financial sector, there are strong disbursements despite higher interest rates matched with healthy growth in other incomes.

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