Low growth in developed economies may impact India: PMEAC

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Uncertain market conditions globally may have some impact on India's trade and capital flows if growth rates of developed economies remain low, Prime Minister's Economic Advisory Council (PMEAC) Chairman C. Rangarajan said on Friday.

"The growth rate in developed economies will remain slow and if it continues to remain at low level, it will have some impact upon India both in terms of trade and capital flows," Rangarajan said on the sidelines of an event here.

He, however, discounted the possibility of another round of recession as experienced during 2008-09, after the fall of Lehman Brothers that led to global financial meltdown.

"The possibilities of developed economies slipping into a recession are not that great. They will have a slower growth rate but recession means negative growth rate. I may not believe that is going to happen," Rangarajan said.

He said there is some concern on the growth prospects of developed economies as the debt crisis in Europe remains unresolved.

Rangarajan added, "There are also indications that the American economy may also be weakend. All these have contributed towards a feeling that world economy is not moving as fast as originally envisaged."

The US was taking efforts to revive the economy and it may take a month or so before the "clouds get clear".

He also said there was 'some panic' regarding the direction in which advance economies would move and all these were contributing to a situation in which "currencies are taking a beating".