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RELATED KEYWORDS: Stock Market|Sensex|Raghuram Rajan|IMF|Growth|Governance Reforms|Global Flux|G20|Financial Stability|Fed Reserve|Christine Lagarde|Arun Jaitley
Global flux transient, India's 'real economy' firm, Jaitley says at G20 summit
Jaitley, however, said manufacturing and services were picking up which would result in a respectable growth rate.
ANKARA: Finance minister Arun Jaitley termed the flux in global markets following Chinese currency devaluation and speculation over the US Fed rate hike as transient features which will not impact India because its "real economy" remains sound and is in a position to post robust growth.
As the G-20 finance ministers debated the global situation amid deepening fears of a slowdown and weakening growth, Jaitley said the last one month has been "extremely choppy and sensitive" for the stock markets because of external factors. "But at this stage, one needs to distinguish between real economy and the impact of currency devaluation on stock markets and our domestic currencies which are transient features. With the transient trends blowing over, it is the real economy that is going to matter. It will dictate the currency valuations and stock market."
He said compared to the rest of the world, India was on a sound footing because of its macro-economic statistics while the US's second-quarter growth figures and dipping unemployment report were other positives.
"We have to concentrate on our real economy - manufacturing, infrastructure and services. On agriculture front, we started well in June-July but did not have a very positive monsoon in August which is a source of some concern," he said.
Jaitley, however, said manufacturing and services were picking up which would result in a respectable growth rate.
Meanwhile, the G-20 finance ministers and central bank governors meeting issued a communique reiterating its commitment to "more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals and avoid persistent exchange rate misalignments ... we will refrain from competitive devaluations".
IMF chief Christine Lagarde, addressing a press meet, expressed confidence in China, saying a candid talk with the country showed its commitment to move from a controlled economy to a market determined one. She said there were necessary bumps in China's growth transition. She said there were discussions with China on markets, exchange rates and reforms, adding it was a "great transformation" to market-determined economy which was not an easy process.
Lagarde urged the US Fed to be sure about its decision to raise the rates that it had not done for a long time. She said the country had to be sure about the data on price stability and jobs before making the move, cautioning that it had to be made for good and could not be a testing of waters.
The G20 communique expressed "deep disappointment" with continued delay in rolling out 2010 IMF Quota and Governance reforms and urged the United States to ratify them soon.
It also re-emphasised the priority of tackling financing channels of terrorism by deepening cooperation on cross-border freezing requests besides general freezing of terrorist assets.
As the G-20 finance ministers debated the global situation amid deepening fears of a slowdown and weakening growth, Jaitley said the last one month has been "extremely choppy and sensitive" for the stock markets because of external factors. "But at this stage, one needs to distinguish between real economy and the impact of currency devaluation on stock markets and our domestic currencies which are transient features. With the transient trends blowing over, it is the real economy that is going to matter. It will dictate the currency valuations and stock market."
He said compared to the rest of the world, India was on a sound footing because of its macro-economic statistics while the US's second-quarter growth figures and dipping unemployment report were other positives.
Jaitley, however, said manufacturing and services were picking up which would result in a respectable growth rate.
Meanwhile, the G-20 finance ministers and central bank governors meeting issued a communique reiterating its commitment to "more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals and avoid persistent exchange rate misalignments ... we will refrain from competitive devaluations".
IMF chief Christine Lagarde, addressing a press meet, expressed confidence in China, saying a candid talk with the country showed its commitment to move from a controlled economy to a market determined one. She said there were necessary bumps in China's growth transition. She said there were discussions with China on markets, exchange rates and reforms, adding it was a "great transformation" to market-determined economy which was not an easy process.
Lagarde urged the US Fed to be sure about its decision to raise the rates that it had not done for a long time. She said the country had to be sure about the data on price stability and jobs before making the move, cautioning that it had to be made for good and could not be a testing of waters.
The G20 communique expressed "deep disappointment" with continued delay in rolling out 2010 IMF Quota and Governance reforms and urged the United States to ratify them soon.
It also re-emphasised the priority of tackling financing channels of terrorism by deepening cooperation on cross-border freezing requests besides general freezing of terrorist assets.
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