S&P tells India to wean away from Euro zone

Eurozone expected to further contract in present financial year while growing slightly higher in the next fiscal

Rating agency giant Standard and Poor’s today said that India needed to shift its focus from the Eurozone, which is already reeling under a severe financial crisis, if it wanted to achieve higher level growth.

“You cannot keep looking at the Eurozone as a source of incremental growth. If you want to achieve high growth levels, then you should shift your focus because the Eurozone is in a very difficult situation. No one considers the Eurozone as the source of growth anymore,” Paul Sheard, executive managing director and chief global economist said here today during the Asian Development Bank (ADB) Annual Meeting of the Board of Governors.

Sheard also said that the Eurozone was expected to further contract in the present financial year while growing slightly higher in the next fiscal.

“This will be a year of yet another contraction for the Eurozone. Next year, the growth will be slightly better. But then too, it will be lower than the peak levels of 3 per cent growth. They lack a macroeconomic policy outlook,” he added.

The S&P also noted the announcement of a slew of reforms by the Indian government had not translated into growth.