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Reading the signs for global economy
Fri, 26 Apr Pre-Open

If statistics are to be believed, the slowdown in the global economy seems like a writing on the wall. And it is not just Western economies suffering from a slowdown .Even emerging giants like China have seemed to catch the fever as seen from weakness in the manufacturing data. On the top of fundamentals deteriorating, the dragon economy is likely to be a victim to speculative forces as suggested by the rising property prices.

Things are not better for Western economies either. The earning season in the US has started on a poor note. The lacklustre data on housing recovery and job growth and weakening demand for imports in European Union is further disappointing for the US. On top of all this, the decline in the bond yields and even gold prices almost confirm that the global economy has hit a soft patch and is unlikely to come out of the woods anytime soon.

Having witnessed a slowdown for all these years, an interesting point is what should be the strategy going forward. Quantitative easing has not exactly helped the economies that seem to be increasingly indifferent to any such measures. That said, shift to austerity to overcome the downturn is not something that everyone seems to be convinced about.

Unfortunately, with increasing coupling among the global markets, it is hard to be optimistic about the future of the global economy, especially in the short term. As far as India is concerned, the fall in the prices of oil and gold are positive for the country's fiscal health. However, it is likely to witness some slowdown due to weakness in the global economic environment. While we can do little about the impact of external factors, it is time to bring in reforms and the focus on the urgency to implement them.

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