Pranab for action at global level to deal with financial crisis

Concerned over sluggishness in the domestic economy and deepening financial crisis in Europe, Finance Minister Pranab Mukherjee today said the global community can't afford to lose its nerve and will have to deal collectively with the situation.

"A series of bad news are coming. First we had the IIP index (at 3.3% in July) lowest in two years... And (second) lengthening shadow of the Eurozone crisis all over the market in the world is matter of concern. But at the same time, we cannot lose our nerve," he said on sidelines of an Icrier conference.

Describing the high commodity and food prices a threat to growth and food security in energy dependent emerging economy, the Minister called for collective global action to overcome the crisis.

"We shall have to work collectively and see that we can overcome the impasse," Mukherjee said.

His comments came a day after the country's industrial production fell to a 21-month low of 3.3% in July, and the likelihood of a sovereign debt default by Greece looming large again.

The developments in Greece have rattled markets globally, with India's BSE benchmark Sensex falling over two% yesterday.

Mukherjee said the growth in most advanced economies has declined in the second quarter of 2011 and emerging markets are witnessing a combination of moderation in growth and rising inflation.

"There is wide spread apprehension that even the tepid global economic recovery that we have seen so far, is stalling," he said.