How India can become the third largest economy globally?
Published on Wed, Oct 04, 2006 at 10:36 | Source : Moneycontrol.com
Updated at Thu, Oct 05, 2006 at 10:14
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How India can become the third largest economy globally?
Jim O'Neill, Head of Global Economic Research at Goldman Sachs believes that India has the potential to grow at a faster rate than China and could be the third largest economy in the next 40 years.
Jim O'Neill, Head of Global Economic Research at Goldman Sachs believes that India has the potential to grow at a faster rate than China and could be the third largest economy in the next 40 years.
He further says that the US economy is slowing down and that the softening of the US economy will ease inflation pressure. Oil prices will not be a major concern for inflation, he says.
O'Neill is of the opinion that the Fed will start rate cuts by February due to declining crude prices.
He is quite bullish on BRICs and believes that the BRICs theme has a long way to go. He has a firm outlook for commodities.
Excerpts from CNBC-TV18's exclusive interview with Jim O'Neill:
Q: What do you think of the US economy?
A: I think the economy is slowing, but I don't think we are headed for a full-blown recession. US economy is entering a period where we are going to slow down, somewhere in the vicinity of 2-2.5% growth, which I think is just fine.
Q: Which parts of the data is making you confident that it will be 2-3% which might be acceptable from a global equity markets standpoint and it won't get worse than that?
A: I am sort of describing it as a 'happy slowdown' because of a number of factors that are all happening at the same time. We have got the housing market, which is weak but you have got other parts of the economy, which is still doing fine. Investment spending is quite strong.
I call it a 'happy slowdown' because the softening of the economy allows inflationary pressures to ease in the US, which means the Fed does not need to raise rates any more. Infact they might reduce them next year.
He is quite bullish on BRICs and believes that the BRICs theme has a long way to go. He has a firm outlook for commodities. 
