US sub-prime crisis may hit India''s economic growth: Dun & Broadstreet
18 September 2007
Mumbai: The sub-prime mortgage crisis in the US is likely to affect economic growth in India as several export-oriented companies may get affected, business information provider Dun & Bradstreet said.
The Indian rupee would continue to remain strong with the average value in the range of 40.80-41 a dollar for September 2007, D&B said in a report.
"The perceived risks to US growth prospects, a possible outcome of the sub-prime crisis, do pose concern for India''s growth outlook, as several export-oriented companies, in particular companies that cater to the banking, financial services and insurance (BFSI) segment, could get adversely impacted," D&B India chief operating officer Kaushal Sampat said in the economy forecast report.
Industrial production is expected to recover to 8.0 per cent during August 07 from nine-month low of 7.1 per cent in July 2007. However, D&B said, considering the lagged impact of high interest rates, the appreciation of the rupee and the moderation of industrial growth, GDP growth is likely to slowdown during the months to come.
"The initial impact of the repeated hikes in interest rates which was felt by the real estate and construction sector got transmitted to the core sector," the report said.
"The impact on other interest-sensitive items like consumer durables got transmitted to related sectors in the production and distribution chain. Similarly, export-oriented manufacturing and services are facing the brunt of rupee appreciation, which is passed on to the envelope of their product chain," it added.