Finance minister Pranab Mukherjee on Wednesday said major emerging market economies are experiencing robust growth, though surge in capital inflows and inflation, especially through hardening of global commodity price, are a source of worry.
Addressing senior officials of the Indian Foreign Service (IFS), he said in the case of Europe, there are still some concerns, with Greece followed by Ireland and now Portugal seeking help from the European Union and the International Monetary Fund (IMF).
There may be other countries in the European Union that may face sovereign debt problems, Mukherjee said, adding there are some concerns on the strength of the post crisis revival in these economies.
The minister, however, said he is hopeful that on the whole, the year 2011 would see an improvement in the world economy.
Global crude is still above USD 100 a barrel, while wholesale price inflation stood at 8.98% in March.
Mukherjee said leaders of the G20 countries have been discussing global financial instability and the resulting economic slowdown. "...we are engaged in finding ways to ensure better macroeconomic coordination, regulation of markets, strengthening of the monitoring and response mechanisms and promoting growth in a sustainable manner," he added.
At the same time, countries in the developed and the developing world have adopted revival strategies, keeping in with their needs, the minister added.
On diplomacy, Mukherjee said, Indian diplomacy has to acquire a decisive economic perspective in its approach.
He said, while anchoring the foreign policy primarily towards promotion of national interest, there is a need to engage with the partners in a manner to create strong mutual stakes in each other's development process, in general, and economies in particular.