The fears of an impending U.S. recession may not affect india in a significantly adverse manner if one were to go by the report of Inernaitional Credit Rating Agency, Standard and Poor. Here is a list of most vulnerable, moderately vulnerable and least vulnerable countires.
MOST VULNERABLE: Countries that are likely to be affected the most are Pakistan, Singapore, South Korea, Malaysia, the Phillipines and Thailand.
MODERATELY VULNERABLE: The impact of recession is likely to be moderate in Japan, Australia, Hongkong, Indonesia and Srilanka.
LEAST VULNERABLE; India and China have been placed in the least vulnerable category.
REASONS: The reasons attributed to the least vulnerablilyt of India is its large domestic market and small export sector. However, it could result in a decline of capital inflows and further weakaning of exports. As a result, there could a widening of current account deficit whihc can put pressure on the countri’s expernal position.
However, it is unclear as to how China has been clubbed with Inida. It is true that China also has a huge domestic market;but the comparison ends there as it has a huge export market and any major upheavel in any part of the developed world is bound to have a significant repurcussion on its economy.