Crisis not to snowball into another meltdown: PMEAC

The Prime Minister's economic panel does not expect the Dubai debt crisis to trigger another meltdown in the world and has retained its forecast of Indian economic growth rate to 6.5 per cent for the current fiscal.

“I don't expect really a slip back as far as the economic recovery is concerned. Most countries in the West have shown positive growth in the third quarter of 2009 and this trend will continue. But as we all know recovery is going to be slow and modest,” Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said here.

Rangarajan said probably the West Asian countries would come to the rescue of Dubai, which may not plunge the world into another financial meltdown.

Dubai's $80 billion debt woes have sent shock waves around the world, showing how fragile the economic recovery is.

Asked whether the crisis in Dubai would lead his council to revise its forecast for India's economic growth this fiscal, he said, “I do not think so, because the Indian economy is driven primarily by the domestic demand.”

The council pegged Indian economy to grow by 6.5 per cent this fiscal against 6.7 per cent a year ago.