India’s response to the crisis
As an emerging economy, India has not been as adversely hit by the global financial crisis as European and North American countries. India registered sustained record GDP growth of over 9 % for 3 consecutive years. This year’s growth rate is expected to be smaller but still at a high level of 7.1%.
And, unlike some developing countries, the impact of the financial and economic crisis on remittances is not expected to be large either. Some newspapers actually predict a positive impact; although jobs abroad are assumed to decline, this might mean that non-resident Indians will bring in foreign inflow since they will bring back their accumulated savings upon their return. Other sources are saying that remittances will only be marginally affected by the current financial crisis.
Yet, due to its integration in the global markets, India is certainly starting to feel the impacts of the crisis. There are reports about private sector companies who have stopped hiring people and first hints about unpaid leave in some major companies, such as Air India.
