Mumbai: European Central Bank president Jean-Claude Trichet said on Monday the future looked bright for emerging market economies such as India, and their growth would lead to a profound rebalancing of world output.
All economies of systemic importance should be part of the response to global issues, Trichet said at the banking conference in Mumbai, adding the process of bringing more voices to such discussions was already underway.
“The vigour of growth in emerging markets and its resilience are good news for all of us,” he said, after noting that emerging markets were expected to account for more than half of world economic growth this year. “It suggests that the world economy may be better able to rely on the dynamism of these economies, in particular, should growth in other regions lose some momentum.”
Trichet did talk about the subprime crisis. He said emerging markets looked to have a bright future, and were likely to become even weightier in the world economy.
“The developments we observe today are, therefore, likely to be the precursor of a profound rebalancing in the distribution of world output tomorrow,” he said, adding this called for constant monitoring and cooperation in the international community.
“It cannot be excluded that this process of rebalancing might be ‘non-linear’, with episodes of discontinuity, perhaps also including economic and financial crises somewhere down the line.”
For Europe, the growth of emerging market economies offered opportunities to increase trade and as a source of investment. “Emerging market competition also strengthens the incentives to make further progress in terms of structural reforms in our economies, which are, in any case, needed,” he said. As the world economy grew and emerging economies became more important, challenges often were no longer confined to a single economy but could spread through global markets.
“And global solutions cannot be found without the active participation of important players, from both mature and emerging market economies,” he said. “India is of course part of these important emerging economies, as are Brazil, China, Mexico and South Africa.” REUTERS