ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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COMMENTARY- Asian Currency Crisis and the Indian Economy

the Indian Economy Dhanmanjiri Sathe IT is many months since the currency crisis hit the south-east Asian economies and what the world saw at that time can best be described in Keynes's words as 'casino capitalism'. However, now the time has come to examine, in detail, the impact which the crisis would have on the Indian economy. There would be two kind of effects on the Indian economy. The indirect effect would he the effect of the crisis on the world economy and then the effect of the world on the Indian economy. Six months ago, the IMF had forecasted a rate of growth of 4 percent for the world economy for the period 1997-98, Now this forecast has been downgraded to 3.5 per cent. Slower rate of growth for the world economy would certainly affect the Indian economy and more specifically Indian exports in a negative way. However, in this note we would be focusing on the direct implications of the south-east Asian crisis, i e, look at the direct trade links between some of the south-east Asian economics and the Indian economy and examine how they are likely to be affected due to the crisis. Thus we have essentially concentrated on the 'real' economy as against the 'financial' economy.

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