With its strong economic fundamentals, India would be able to sail through the global economic crisis without destabilising its financial sector, thanks to a proactive monetary policy, a World Bank report has said.
Riding on high savings rate and prudent foreign debt management, India’s macro economic indicators are sound, the report – Global Financial Crisis: Implications for South Asia, added.
The report, however, pointed out that the nature and depth of the global financial crisis is still evolving and this may further slow down of capital flows. It also said that India is relatively more exposed to the contagion effects of the global financial markets. The good news, however, is that India has a solid banking system with low non performing assets and high capital base, which is equipped to cushion the economy at this stage.