Rural growth, infrastructure drive India
India’s software and real estate sectors could suffer from a rising rupee and slowdown in the West, but rural growth and infrastructure investment will power economic expansion of 10% over the next three years, a top DSP Merrill Lynch executive told Reuters on Wednesday.
Andrew Holland, head of the Strategic Risk Group at DSP Merrill Lynch in India, also told Reuters the biggest threats India faced from a slowdown in the United States would be slackening raw materials demand from neighboring China and further upward pressure on the rupee as capital flowed to emerging markets. „The first quarter will be pretty nasty in terms of what we see in the US,” Holland told the Reuters India Investment Summit.
„With the decoupling story, everyone’s saying all the money goes to emerging markets, and I think it’s going to be a struggle for a lot of Asian countries to manage that inflow in terms of appreciating currencies,” Holland told Reuters. Holland said India’s pharmaceutical and textile companies would be forced to cut costs if the rupee keeps rising. „The software industry, I think, will have a harder task ahead because I think a lot of the financial industries in the US and Europe will slow considerably,” Holland told Reuters. (full text is at:)
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