Mar 21, 2008

US slowdown may affect India's growth rate: UNDP

The slowdown in the US economy could affect the growth rate of India, a top official of the United Nations Development Programme said here on Tuesday.

"India achieved eight per cent plus growth rate over the last three years, when the global economy was doing well," Kemal Dervis, Administrator of UNDP, told a press conference.

But if there is a slowdown in the US, which could affect the global growth, it may be difficult for India to sustain the growth rate of eight per cent, Dervis said.

The UNDP is the global development network of the United Nations.

When asked whether recession would hit the US, Dervis said it is difficult to say, though 70 per cent of the economists believe so. But there could be a substantial slowdown, which may impact the world economy and markets.

He said the impact of the US slowdown would impact countries based on the their dependence on the world's largest economy. The financial markets are interlinked and equity and other financial assets could see a decline, he said.

"The slowdown will affect imports into the US as the people feel less rich, they will spend less," he said.

Talking about representation for India on the Security Council of the UN, Kemal Dervis, who is the third highest ranking official in the United Nations System after the Secretary-General and the Deputy Secretary-General, said he would not like to comment on it as an UN official.

But he said the current structure of the security council reflects post World War II scenario and it would be fair if there are some changes in it.

Referring to the UNDP, he said global assistance under UNDP is worth 2 billion dollars and bulk of it goes to countries from Sub-Sahara and Africa.

The allocation for India is 50 million dollars. The focus of the UNDP is on poverty eradication, sustainable livelihoods and capacity building among the poor, he added.