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Global recession to last 2 years: Morgan Stanley

Chetan Ahya, Managing Director of Morgan Stanley India, feels economies will take more time to come out of the global recession. The recession, he said, will take long to get over, and can last for as much as two years. As real economy comes under pressure, we will see rise in non-performing loans, he said, adding that credit markets will recover only once the recession is closer to an end. Ahya added the current account deficit and strong credit growth compounds problems.

Ahya also said the issue of exchange rates remains a key challenge to emerging markets, adding that he sees rupee depreciating to lows of Rs 54-55 per dollar in five or six months.


On the indian market the Sensex slipped below 8k, Nifty at sub-2,300 levels

The Sensex broke another psychological mark of 8,000 today while the Nifty slipped below the 2,300 level as well on weak global cues and intense unwinding by foreign institutional investors. Asian markets are also trading deep in the red.

Excerpts from interview

Q: The first signs of recession are coming out from the West––it is there in United Kingdom, Singapore, etc. How much more painful do you expect the global economic data to be over the next few quarters?

A: We are now stuck in a vicious loop where the credit markets are weighing on the real economy. As the real economy goes through stress, one will probably see further rise in the NPLs (non-performing loans) making the lending standards even tighter for the banking system. So unfortunately, we are in a cycle which as IMF (International Monetary Fund) has highlighted, in one of its papers, that whenever there is recession in the global economy driven by either the credit problems or the property market, it tends to be longer. Thus, we have to keep in mind that this global recession is going to take longer to come out and the credit markets will settle only once a recession is closer to the end.

thanks :ref:

Japanese translation

Q: 不況の: 最初の徴候は、West––it から出てくるはイギリス、シンガポールなどであります。 方法より痛みは期待どおり、グローバルの経済のデータを次のいくつかの四半期経由か。
A: 私たちはいまに残るヴィシャス ループ、実際の経済に貸方市場が weighing 場所。 実際の経済はストレスを経由とさらの上昇、銀行システムも厳しく、貸付の標準をつくって NPLs (以外を実行する貸与) でおそらく表示 1 されます。 残念ながらこれ、IMF (国際通貨基金) としてで強調表示、書類のいずれかのことを貸方の問題またはプロパティの市場に駆らグローバル経済不況があるたびに傾向に長い時間があるサイクルでおります。 こうして、このグローバル不況が出てくるに時間がかかるし、不況が最後に近い 1 回だけに、貸方市場が決済ことに注意してくださいする必要があります。


German Translation

F: die ersten Anzeichen der Rezession aus der West––it kommen, ist es in Großbritannien, Singapur, etc.. Wie viel mehr schmerzhaft erwarten Sie die globalen wirtschaftlichen Daten in den nächsten Quartalen zu?
A: Wir sind jetzt in einer bösartiger Schleife stecken, wo die Kreditmärkten auf die reale Wirtschaft wiegen. Wie die reale Wirtschaft stress durchläuft, wird man wahrscheinlich weitere Anstieg der NPLs (non-ausführen Darlehen) machen die Ausleihe standards noch strengere für das banking-system sehen. So leider sind wir in einem Zyklus die als IMF (Internationaler Währungsfonds) in einem der seine Papiere, hervorgehoben hat, dass wenn Rezession in der globalen Wirtschaft angetrieben durch die credit-Probleme oder der Immobilienmarkt, es ist mehr. Daher müssen wir Bitte beachten Sie, die dieser globalen Rezession wird kommen, länger und die Kreditmärkten gleicht nur einmal eine Rezession näher an das Ende ist.

Spanish Translation

P: los de los primeros signos de recesión vienen a la West––it existe en Reino Unido, Singapur, etc.. ¿Cuánto más dolorosa espera los datos económicos globales que durante los próximos trimestres pocos?
Ahora A: estamos atascados en un bucle vicioso donde los mercados de crédito son pesaje sobre la economía real. Medida que la economía real pasa a través de estrés, uno probablemente verá mayor aumento en los NPLs (no realizar préstamos) hacer que las normas de préstamos incluso más estrictos para el sistema bancario. Así que lamentablemente, estamos en un ciclo que como IMF (Fondo Monetario Internacional) ha puesto de relieve, en uno de sus documentos, que siempre que hay recesión en la economía mundial impulsada por los problemas de crédito o el mercado inmobiliario, tiende a ser más largo. Así, tenemos que tener en cuenta que esta recesión mundial va a tomar más tiempo a venir y los mercados de crédito se resolver sólo una vez está más cerca al final de una recesión.

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