Brazil, India deficits leads to ‘inevitable’ crisis warns China

[ChinaToday]

Li Daokui told a forum that emerging economies such as Brazil and India face fiscal and current account deficits and a crisis was “inevitable,” Caijing Magazine reported on its website ????? - CAIJING.COM.CN. “China will play a very important role during the financial consolidation”.

But there will be no such crisis in China because it is quite different from most other developing and developed countries,” he said. In February, the Indian government raised “serious concern” about a trade deficit that could more than double to 278.5 billion USD in three years and may cause an unquestionable current account deficit.

Brazil's current account deficit ballooned to a record for the month of March as foreign companies in Brazil sent more profits home and Brazilians spent more on travel and goods overseas. In January, the International Monetary Fund warned fiscal balances in Brazil, China and India were weaker than it had earlier projected.

Li Daokui also expects the US dollar, Euro and Yen to face downward pressure over the medium and long term.

The IMF had projected Brazil's debt-to-GDP ratio at 66.8% and India's at 71.8% while for China it had projected a debt-to-GDP ratio of 19.1%, warning of deterioration in the fiscal accounts of India and Brazil.

The Brazilian government had since announced budget cuts, but the country still need to do more to earn an upgrade on its sovereign debt rating, according to analysts.
For India, however, it could easily bridge the deficit if its government manages to bring at least part of the black money stashed away by Indian citizens in overseas tax havens.


Brazil, India current account deficits leads to

Looking at india trade deficit instead on keep predicting china economy bubble going to burst in so and so year i suggest india should take a look at her own problems.

 

[ChinaToday]

For India, however, it could easily bridge the deficit if its government manages to bring at least part of the black money stashed away by Indian citizens in overseas tax havens.

easily said than done.

 

[kingkobra]

For India, however, it could easily bridge the deficit if its government manages to bring at least part of the black money stashed away by Indian citizens in overseas tax havens.

easily said than done.

but there is no guarantee that our corrupt politicians will keep that money in national treasury and not in their pockets..

 

[rcrmj]

but there is no guarantee that our corrupt politicians will keep that money in national treasury and not in their pockets..

but india supposed to be 'democractic' so how about the people, they dont demand those corrupted politicians to return the money otherwise through them out of the power, or maybe democracy is just a lable?

 

[Maritimer]

India's merchandise trade deficit is offset by the export surplus in services and non-resident workers remittance, thereby cutting current account deficit to around 3% of GDP. There is nothing alarming for India in the numbers at least in the medium term. The only worry could be sharp increase in crude oil prices that could make the trade deficit unmanageable.

As far as the fiscal deficit is concerned, 4.6% of GDP is still very much sustainable for a fast growing economy. And then, the Government always has the option of selling minority stake in large public sector companies to make funds available for development projects, just like it did with the 3G spectrum auction last year.

India's currency has been stable at INR 45.00/USD for nearly a decade now and the forex reserves have sored to $310 billion. Of course there is a large untapped potential in the Indian economy that is waiting for new investments from both govt and private sector, there is problem of corruption and income disparity, but there is no crisis visible in the foreseeable future as is made out to be by the Chinese analysts.

 

[newdelhinsa]

Chinese analyst wants to blame future crisis in unfolding because of cooked books of Chinese economies on comparatively transparent economies like India and Brazil. Nice try.

 

[Zeeshan360]

but india supposed to be 'democractic' so how about the people, they dont demand those corrupted politicians to return the money otherwise through them out of the power, or maybe democracy is just a lable?

Stealth troll <_<

 

[rcrmj]

comparatively transparent economies like India. Nice try.

lol``trillion US dolla 'hidden' in offsore account is indeed 'transparent'```when we were in India setting up the factories, god know how much money we spent on those greedy politicains``more than our budget in China, taking the 1/3 labour cost from india into account`!

 

[rcrmj]

India's merchandise trade deficit is offset by the export surplus in services and non-resident workers remittance, thereby cutting current account deficit to around 3% of GDP. There is nothing alarming for India in the numbers at least in the medium term. The only worry could be sharp increase in crude oil prices that could make the trade deficit unmanageable.

As far as the fiscal deficit is concerned, 4.6% of GDP is still very much sustainable for a fast growing economy. And then, the Government always has the option of selling minority stake in large public sector companies to make funds available for development projects, just like it did with the 3G spectrum auction last year.

India's currency has been stable at INR 45.00/USD for nearly a decade now and the forex reserves have sored to $310 billion. Of course there is a large untapped potential in the Indian economy that is waiting for new investments from both govt and private sector, there is problem of corruption and income disparity, but there is no crisis visible in the foreseeable future as is made out to be by the Chinese analysts.

you've just discribed something similar conditions of what western countries' economy had before mid 2007, and what had happened now?

 

[Archie]

For India, however, it could easily bridge the deficit if its government manages to bring at least part of the black money stashed away by Indian citizens in overseas tax havens.

easily said than done.

Yeah u are right Sinotroll
Though govt has managed to track down 15 Billion USD in last one yr with 9 Billion USD traced to one man Hasan Ali ,
but that still leaves 480 Billion USD still un accounted for

 

[Archie]

but india supposed to be 'democractic' so how about the people, they dont demand those corrupted politicians to return the money otherwise through them out of the power, or maybe democracy is just a lable?

I am not sure that u know too much about indian politics
But in recent elections 2 of the most corrupt regional parties of India got Booted out of power in there respected state by landslides

For instance DMK political party responsible for causing a loss of 38 Billion USD to the exchequer , lost by 4/5th majority In Indian state of Tamil Nadu
While India's anti development commies lost 2 states ie West Bengal by 3/4 th majority while Kerala was a close loss for them

 

[Maritimer]

you've just discribed something similar conditions of what western countries' economy had before mid 2007, and what had happened now?

Oh please, tell me which Western economy was growing at an average of 9% in mid-2007? None of what I described is similar to the Western economies of mid-2007. The West (esp USA) is facing crises due to the real estate bubble, huge external debt, low forex reserves, saturation in terms of productivity, importing everything from toilet paper to cars, lack of manpower, low rates of GDP growth, large budgets due to war and healthcare bills, etc.

On the other hand, India's economy is based on internal demand that is triggering investments and high growth rates. India's banking sector has one of the least non-performing assets and is well regulated. It is one of the reasons why India was largely unaffected by any of the financial crisis be it ASEAN crisis in the late 1990s or the Western economy crisis of the last 2 years. As I said earlier, India's current account deficit will reduce considerably with the boost in petroleum and engineering goods exports. The fiscal deficit will be minimized by selling off government owned companies. So, there is no evidence of any crisis, certainly it is "inevitable".

 

[Maritimer]

but india supposed to be 'democractic' so how about the people, they dont demand those corrupted politicians to return the money otherwise through them out of the power, or maybe democracy is just a lable?

I guess you have not followed the recent elections in India. The party that was involved in one of the largest corruption case was thrown out by the people through the ballot last week. Please search 'Tamil Nadu elections 2011' on google. Not a drop of blood was spilled, the defeated party graciously accepted defeat. This is how democracy works, but then how would you know?

 

[darkhero]

I guess you have not followed the recent elections in India. The party that was involved in one of the largest corruption case was thrown out by the people through the ballot last week. Please search 'Tamil Nadu elections 2011' on google. Not a drop of blood was spilled, the defeated party graciously accepted defeat. This is how democracy works, but then how would you know?

The current most corrupted party was defeated. Then you elected a less corrupted party. When this new party is in power, it will become the most corrupted party soon. That's your democracy.

 

[vamsi]

For India, however, it could easily bridge the deficit if its government manages to bring at least part of the black money stashed away by Indian citizens in overseas tax havens.

easily said than done.

brining black money to home country is a non issuer to begin with. If it comes it may be helpful but as a nationour policy makers cant depend on it. deficit can be reduced by foreign investments. If the economy grows atleast 8%+ every year on average it won't be a big problem as long as we keep an eye out to control deficit from growing too large.