MUMBAI (Reuters) - The Reserve Bank of India (RBI) said on Monday the balance of risks on the growth outlook for Asia's third-largest economy had tilted towards the downside due to the global slowdown and deterioration in world financial markets.
"Several significant global and domestic developments recently have rendered the outlook uncertain and have increased the downside risks associated with real GDP growth," the RBI said in its review of macroeconomic and monetary developments.
It said an RBI survey of forecasters in December had placed 2008/09 growth at 6.8 percent, down from 7.7 percent forecast three months earlier.
The central bank will review its monetary policy on Tuesday, as evidence of sharp downturn in the economy began to surface against the backdrop of an economic slowdown around the world.
The economy and markets took an unexpected knock from the global credit squeeze in the wake of the collapse of Lehman Brothers last September, exposing the country's vulnerability to shocks elsewhere.
In order to boost business sentiment and shore up growth, the central bank has aggressively cut rates and banks' cash reserve requirement since mid-October while the government has announced a modest fiscal stimulus.
But the RBI saw some silver lining amid the gloom.
"While downside risks would be extending to the future, the fall in commodity including oil prices and the coordinated fiscal and monetary stimulus are expected to revive the growth momentum," it said.
Monday, January 26, 2009
U.N. says civilians killed as Sri Lanka battle rages
COLOMBO (Reuters) - Sri Lankan troops surged forward on Monday after seizing the last big town held by Tamil Tiger rebels, aiming to strike a death blow to the 25-year separatist insurgency, the military said.
Underlining the threat facing thousands of civilians trapped in the war zone, the United Nations in Sri Lanka said dozens of people had been killed or wounded over the weekend in shelling from sources it could not identify.
On Sunday the army announced the capture of Mullaittivu, the northeastern port the Liberation Tigers of Tamil Eelam (LTTE) seized in 1996 and turned into a major military operations and command centre.
That drove the Colombo Stock Exchange up 3.2 percent to a 10-week high, analysts said as fighting continued.
"The troops are consolidating their positions in Mullaittivu today, and the other troops are moving towards Puthukudiruppu and others are fighting south of there," military spokesman Brigadier Udaya Nanayakkara said, referring to an LTTE-held village.
With the loss of Mullaittivu, the LTTE is now confined to 300 square km of jungle in the Indian Ocean island's northeast, down from 15,000 square km when the war re-ignited in 2006.
That leaves the LTTE -- on U.S., EU and Indian terrorism lists -- with a handful of bases and village scattered across the jungles from which they have fought since the war kicked off in earnest in 1983.
"The LTTE has been destroyed as a military force, but they still have terrorist capabilities," said John Drake, a security analyst with AKE Group in London.
Underlining the threat facing thousands of civilians trapped in the war zone, the United Nations in Sri Lanka said dozens of people had been killed or wounded over the weekend in shelling from sources it could not identify.
On Sunday the army announced the capture of Mullaittivu, the northeastern port the Liberation Tigers of Tamil Eelam (LTTE) seized in 1996 and turned into a major military operations and command centre.
That drove the Colombo Stock Exchange up 3.2 percent to a 10-week high, analysts said as fighting continued.
"The troops are consolidating their positions in Mullaittivu today, and the other troops are moving towards Puthukudiruppu and others are fighting south of there," military spokesman Brigadier Udaya Nanayakkara said, referring to an LTTE-held village.
With the loss of Mullaittivu, the LTTE is now confined to 300 square km of jungle in the Indian Ocean island's northeast, down from 15,000 square km when the war re-ignited in 2006.
That leaves the LTTE -- on U.S., EU and Indian terrorism lists -- with a handful of bases and village scattered across the jungles from which they have fought since the war kicked off in earnest in 1983.
"The LTTE has been destroyed as a military force, but they still have terrorist capabilities," said John Drake, a security analyst with AKE Group in London.
India honours Mumbai attack heroes on Republic Day
NEW DELHI (Reuters) - India bestowed its highest peacetime gallantry award on Monday on half a dozen security men killed fighting Pakistani militants in Mumbai last year, an attack that worsened tensions between the nuclear-armed rivals.
Thousands of police and soldiers lined the route of the annual military parade in New Delhi, while the chief guest, Kazakhstan President Nursultan Nazarbayev, looked on with Indian leaders from a bullet-proof stand.
In a ceremony steeped in symbolism, President Pratibha Patil gave away India's highest peacetime military awards to 11 policemen and soldiers posthumously, including six shot dead fighting Pakistani militants in Mumbai.
Patil handed over a citation and a medal to the family members of the dead security men, while a sombre announcement recalled their "valiant actions and supreme sacrifice".
The Mumbai attacks, in which 10 gunmen killed 179 people in coordinated attacks, reignited tensions between the two South Asian rivals, with India blaming Pakistan-based Lashkar-e-Taiba militants while also accusing Islamabad of not taking action.
India, which has mounted a diplomatic offensive against Pakistan, is frustrated at what it sees as Pakistan's slow response in arresting planners of the attacks.
Despite the tension, the chances of military confrontation between the old foes who have fought three wars since 1947 is low thanks in part to the diplomacy of the United States and other powers, analysts say.
Prime Minister Manmohan Singh did not attend the celebrations, which showcase the country's cultural heritage and military might, as he is recovering in hospital after a heart bypass operation last week.
Thousands of police and soldiers lined the route of the annual military parade in New Delhi, while the chief guest, Kazakhstan President Nursultan Nazarbayev, looked on with Indian leaders from a bullet-proof stand.
In a ceremony steeped in symbolism, President Pratibha Patil gave away India's highest peacetime military awards to 11 policemen and soldiers posthumously, including six shot dead fighting Pakistani militants in Mumbai.
Patil handed over a citation and a medal to the family members of the dead security men, while a sombre announcement recalled their "valiant actions and supreme sacrifice".
The Mumbai attacks, in which 10 gunmen killed 179 people in coordinated attacks, reignited tensions between the two South Asian rivals, with India blaming Pakistan-based Lashkar-e-Taiba militants while also accusing Islamabad of not taking action.
India, which has mounted a diplomatic offensive against Pakistan, is frustrated at what it sees as Pakistan's slow response in arresting planners of the attacks.
Despite the tension, the chances of military confrontation between the old foes who have fought three wars since 1947 is low thanks in part to the diplomacy of the United States and other powers, analysts say.
Prime Minister Manmohan Singh did not attend the celebrations, which showcase the country's cultural heritage and military might, as he is recovering in hospital after a heart bypass operation last week.
Subscribe to:
Posts (Atom)