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US recession worries India Inc most

A McKinsey survey finds that 83% of Indian executives polled felt the US recession would hit their country's economy, reports S Layak.

business Updated: Apr 07, 2008 03:13 IST
Suman Layak

Indian executives seem to be among the most worried groups about the recession in US, says a recent survey by global management consultants McKinsey & Company. However, they seem to be among the less pessimistic groups when it comes to inflation going up.

The survey comes a day after India recorded its highest ever inflation in three years at 7 per cent for the week ended March 22. Last week, the chief of the US central bank, Ben Bernanke, also admitted that the American economy might not grow in this half of the year.

The area that is most worried both about the US recession and inflation is the Asia Pacific – countries between Australia and Hong Kong, including the south-east Asian nations, New Zealand and Taiwan.

The McKinsey survey says that 83 per cent Indian executives polled felt the US recession would negatively impact the Indian economy and business, and 74 per cent felt it would have a negative impact on their industry and business. Fifty-five per cent Indians polled felt that there have been significant increases in the links between the Indian and US economies in the last three years.

When it comes to inflation, 64 per cent Indians feel that it would go up in the next six months while 20 per cent felt that it would fall. In fact, Indians seem to be one of the most optimistic groups globally on inflation. Only the South Americans seem to fare better at 58 per cent. Around 70 per cent of the Chinese feel that inflation will go up. The number is 79 per cent in North America and 79 per cent in the Asia Pacific.

When compared with China, Indian executives appear more worried. Only 64 per cent of the Chinese felt that the US recession would negatively impact the country while 54 per cent felt it would have a bad effect on their industry. However, 75 per cent of the Chinese felt that their linkages with the US economy had increased significantly in the last three years.