Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Politics / News/  Swine flu scare a hurdle in India’s economy recovery: Moody’s
BackBack

Swine flu scare a hurdle in India’s economy recovery: Moody’s

Swine flu scare a hurdle in India’s economy recovery: Moody’s

Premium

New Delhi: Swine flu scare has come in the way of India’s efforts at economic recovery and some slackening sectors like tourism and trade may witness further slowdown, says Moody’s.

The government finances, already under pressure after dolling out stimulus packages to spur slowing economy, will be strained further by the expenses to prevent deadly swine flu, said Moody’s economy.com, a research arm of Moody’s.

“Swine flu has put up a hurdle on India’s path to economic recovery, Moody’s said, adding, tourism and trade which already began (showing) signs of fatigue in December quarter may experience a further blow," it said.

First, there is the likely need for the government to re-allocate funds from not so urgent fiscal projects to fight the potential pandemic, it said. “However, improvement to infrastructure is also important to India’s continued expansion," it added.

Swine flu scare is likely to weigh on wider economic activity, such as household consumption and business investment, it said.

Asset prices, it said are bound to retreat if the outbreak worsens and discourages investment. “Although India itself may not have upset investors, a general decline in confidence worldwide could spark repatriation of funds from stock markets," it said.

A general decline in confidence worldwide owing to swine flu will not only be a drag on stock prices in India, but will also exert downward pressure on the rupee, Moody’s said.

“The Indian unit has traded between $50-52 for much the past two months. Amid still-fragile investor sentiment, although a net capital inflow into equities occurred in April, another round of net outflow cannot be ruled out," it said.

On the impact of expenses on medical care for swine flu on fiscal deficit, Moody’s said: “The global swine flu outbreak is a major concern to the cash-strapped Indian government. Expenses on preventive measures - or medical treatment when needed will further weigh on India’s fiscal deficit," it said.

Public debt is already equivalent to 80% of the GDP and more borrowing will hurt India’s fiscal profile, it said.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 30 Apr 2009, 05:24 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App