Business
Stable oil prices will be to India's advantage: Subramanian
Bengaluru, June 23
Stable crude oil prices in the international markets would help India
manage its macro-economy well, chief economic advisor Arvind Subramanian
has said.
"I do not see oil prices going beyond $80-85 a barrel
(about 160 litres), given the fundamental changes in the market. If oil
prices remain steady even at that ($80-85) level, I think we can manage
the economy well," Subramanian said at a function here late Monday.
Crude
oil prices (Brent and Nymex) plunged to $45 from a high of $118 over
the past one year but recovered steadily to hover currently around $63
per barrel.
Coinciding with the decline in the oil prices, demand had also come down as evident from loser imports in April-May.
"Besides
decline in our oil import bill, we have seen fundamental shifts in the
international market, which has helped crude oil prices remain steady,"
Subramanian said in a lecture at the Indian Institute for Human
Settlement.
On the flip side, he expressed concern over decline
in exports even from the services sector, including software products,
which led to its (exports) share in the national gross domestic product
(GDP) dip substantially.
"A fall in share of export of goods and
services is worrisome. Though sluggish exports in the manufacturing
sector is part of global slowdown, decline in export of software
services and products from 30 percent per annum in dollar terms over the
last eight years is a matter of concern," Subramanian noted.
On
the bullion front too, gold prices also stabilised after a long volatile
movement in the domestic and international markets, as demand subdued.
"Gold
prices more or less stabilised in May and June, as demand for the
yellow metal softened, especially, as a saving instrument after
inflation dipped and stock markets became attractive," Subramanian said.
Sharing
his outlook on the economy this fiscal and next, he said key indicators
were good in short term, thanks to reform plans, lower inflation and
oil prices.
"The country's economy is poised to grow at 8-8.5
percent next fiscal as given in the Economy Survey for this fiscal. We
(India) are among the bright spots for investments compared to other
countries," he added.