India at high risk of BoP 'shock': Morgan Stanley

[kawaraj]

India faces a "high" risk of a shock in its balance of payments, unless the government cuts spending, including on subsidies, or oil prices decline sharply, Morgan Stanley warns. India is the only country in the region with a current account deficit, and a wide one at that, givenexpectations it hit a record high for the year ended in March.

Given the vulnerability on so many domestic fronts, any signs of global risk aversion would particularly hit flows and the rupee, Morgan Stanley adds.

India at high risk of BoP 'shock': Morgan Stanley - Hindustan Times

 

[DF-41 ICBM]

Indian economy is a glorified ponzi scheme built on quicksand.
Built on debt, debt and more debt.

 

[kak1978]

The last BOP shock had liberalized the Indian economy to a certain extent and the next 20 years have been good. In a functioning democracy like India a BOP shock is whats needed to give impetus to reforms.

 

[IndoCarib]

The last BOP shock had liberalized the Indian economy to a certain extent and the next 20 years have been good. In a functioning democracy like India a BOP shock is whats needed to give impetus to reforms.

Exactly. And also S&P downgrade should make the UPA govt wake up and kick some butt.

 

[kawaraj]

thanks for bringing up this thread, I thought it's merged to

http://www.defence.pk/forums/world-...tering-economy-exports-fell-5-7-per-cent.html

 

[Shinigami]

Indian economy is a glorified ponzi scheme built on quicksand.
Built on debt, debt and more debt.

the legendary chinese iq, once again displaying its splendor

 

[shuttler]

so more credit downgrading forthcoming!

 

[Bobby]

Please give some more shock to kick start our government at full speed again

 

[IndianTiger]

Indian economy is a glorified ponzi scheme built on quicksand.
Built on debt, debt and more debt.

India's External debt is much lower than chinese.

 

[Ganges Zephyr]

India faces a "high" risk of a shock in its balance of payments, unless the government cuts spending, including on subsidies, or oil prices decline sharply, Morgan Stanley warns. India is the only country in the region with a current account deficit, and a wide one at that, givenexpectations it hit a record high for the year ended in March.

Given the vulnerability on so many domestic fronts, any signs of global risk aversion would particularly hit flows and the rupee, Morgan Stanley adds.

Already happened. Oil prices are now at US$ 112
AFP: Oil prices slump on US payrolls data

FACEPALM for Morgan Stanley and the poster

 

[DF-41 ICBM]

I've always said the Indian economy is built on debt and it will have its crisis in the future.
Well guess what, we are here now folks.

The entire Indian growth story is based on going into debt to get the GDP up.
You can do that until you reach a certain point when people lose confidence in your economy and capital leaves your country and investors don't want to hold your currency. That's why the rupee is collapsing.
Watch for more gdp growth to collapse.

To understand why this is happening, you have to understand how the indian economy is built.
It's built on deficit spending and overconsumption of imported goods.
Indian growth story is coming to an end soon. It's growth model is unsustainable.
If they dont take action and reform soon, the currency will continue to collapse and inflation will skyrocket.

 

[Splurgenxs]

Indian economy is a glorified ponzi scheme built on quicksand.
Built on debt, debt and more debt.

another half pound wannabe Economist....thinking they got it all figured out

Behind a Chinese City's Growth, Heavy Debt - WSJ.com

China?s mountain of debt


U know tht All the stimulus spending and Cash infusions have turned and bit u in the azz in the form of non performing assets and asset bubbles right?

China stands way higher in the DBT to GDP ratio than India does as far as 150%


China was said to overcome this factoring in the large trade suurpluss ..but apparently they have turned negative ..there goes the future plan of an everending double digit growth.

It funny how just 6 months form now Chines wre all about 11% growth till Infinity lol ..

 

[illusion8]

Reserve Bank of India governor D Subbarao has said that rising fiscal deficit and short-term debt levels are "quite disturbing" but the nation is not facing a repeat of a 1991 balance of payment crisis. While the 1991 crisis was triggered by high oil prices almost drying foreign reserves and currency crash, large fiscal deficit and current account deficit are lead indicators of stress building up in the system again, he said at a panel discussion on India's economic reforms and development here on Saturday evening.

With Prime Minister Manmohan Singh listening, Subbarao said fiscal deficit in 1991 was 7% and it is ruling at 5.9% in 2012. The current account deficit at 3.6% is higher than 1991 figure and short-term debt at 23.3% of GDP in 2012 is much more than 10.2% in 1991.

"That is quite a disturbing picture. Nevertheless, I would still argue that in 1991, an implosion was imminent. In 2012, an implosion is not imminent," he said.


Stating that the structure of the economy has changed in fundamental ways, he said financial markets are more matured, more diverse and much deeper and have "resilience to absorb shocks". "Our regulatory systems and out crisis response mechanism are more robust and more sophisticated," he added.

While fiscal deficit was not entirely structural in nature, current account deficit was high because of high oil prices and gold imports, he said adding India's foreign exchange reserves today are much larger than those in 1991.

"I am not saying that we have insulated ourselves from all crises for all times (or that) the economy is in pink of health or on a roll (or that) today's macroeconomic situation is not a cause for concern. On the contrary, there are serious concerns about macroeconomic management, policy environment and governance".

Singh, who received a compilation of essays written by leading economists, did not make any formal comment at the discussion except to state that the economy was facing "difficulties", but expressed the hope that they would be overcome with determination. Stating that India growth story was intact, Subbarao said, "We should prove that the current downturn is just a short-term phenomenon, and that the long-term growth drivers will come back into play."

He emphasised that "2012 is not 1991 all over again", but serious concerns are there and a number of things need to be done keeping the big picture in view. HeIndia's economic growth during 2011-12 slipped to three-year low of 6.9%, down from 8.4% in the preceding two years. The government expects the GDP to expand by 7.6% in the current fiscal.

Subbarao, who will be unveiling the annual credit policy on April 17, had met the PM and finance minister Pranab Mukherjee to discuss the country's macro-economic situation earlier in the day. He may have discussed the steps to be announced in annual credit policy to arrest declining growth.

The government proposes to bring down the fiscal deficit to 5.1% of the Gross Domestic Product in the current fiscal from 5.9% last year.

"Imports of gold were high because under the present scenario gold is safe haven."

 

[Zeeshan360]

MMS do it once again after 21 years

 

[dott]

I've always said the Indian economy is built on debt and it will have its crisis in the future.
Well guess what, we are here now folks.

The entire Indian growth story is based on going into debt to get the GDP up.
You can do that until you reach a certain point when people lose confidence in your economy and capital leaves your country and investors don't want to hold your currency. That's why the rupee is collapsing.
Watch for more gdp growth to collapse.

To understand why this is happening, you have to understand how the indian economy is built.
It's built on deficit spending and overconsumption of imported goods.
Indian growth story is coming to an end soon. It's growth model is unsustainable.
If they dont take action and reform soon, the currency will continue to collapse and inflation will skyrocket.

lol if indian economy is on debt what is chinese economy. according to chinese prof every province in chins is greece:
Chinese TV Host Says Regime Nearly Bankrupt | Business & Economy | China | Epoch Times

MMS do it once again after 21 years

he got us out of the problem in 1991 he will do it again before departing.