In an environment when global rating agencies have started downgrading India’s growth outlook, the government has got a pat from the United States, as an US Treasury Department report has said that amid weaker outlook across emerging market economies, India's recovery has strengthened under a new reform agenda; since it is not a large importer, but it is not yet a 'major driver' of global growth.
In its semi-annual 'Report to Congress on International Economic and Exchange Rate Policies' the US Treasury Department said that buoyed by savings of $ 44 billion from drop in prices of oil imports, India's total foreign exchange reserve has reached an all-time monthly average high of $ 328 billion - thus making it the eighth country from the top in terms of foreign reserve.
According to the report, the sharp drop in the price of oil is having a large impact on global current account imbalances. On an annualised basis, the roughly $50-per-barrel decline in the price of oil is generating shifting income of over $600 billion annually from oil exporters to oil importers, holding all else constant, with Europe and Asia the key beneficiaries. As per it, China's savings amounted to nearly $120 billion the largest single country gain from lower oil prices. Japan saved $76 billion, India $44 billion, and Korea $36 billion.
In its report, the Treasury said that weaker outlook is evident across emerging market economies, which exerts a growing influence over global economic prospects. It added that slowdown in domestic Chinese investment and Chinese demand for imported commodities and components is having wide-ranging implications for other economies.
