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'Global downturn not to stop India's momentum'

Most emerging economies including India, have managed to shrug off the presumably unavoidable downturn in the global economic activity, a study reveals.

business Updated: Mar 23, 2008 18:46 IST

Most emerging market economies, including India, have managed to shrug off the presumably unavoidable downturn in the global economic activity and this momentum will sustain in the future also, a leading global financial services information firm says.

"Economic activity in the emerging markets is still purring. India is notching up strong economic momentum, and in Latin America, there have not been any signs so far of the frequently prophesied economic downturn," Germany-based Allianz Dresdner Economic Research said in a report.

Russia's economy expanded by more than eight per cent in 2007, reminiscent of Far-Eastern or even Chinese expansion levels, the report titled "Economy and Markets" added.

The foreign trade data show that most emerging markets, even the Asian economies that have relatively closer ties with the US, have overcome the global economic downturn.

Though their exports to the United States have lost momentum, additional exports have been directed to Europe, and fuelled by the euro's high exchange rate against the US dollar, the total exports have barely been affected so far.

Additional factors that would continue to propel economic activity include commodity prices and domestic demand.

There was a surge in the commodity prices recently, and emerging and developing markets, which are also the exporters of these commodities, benefited from this trend.

Besides, domestic demand is also gathering pace in most countries.