The country’s economy is on a strong wicket going by the debt level while other Asian countries such as China, Hong Kong and Malaysia have witnessed a sharp rise in their domestic credit, a latest report says.
According to Citigroup analysis, the ratio of domestic credit levels in the gross domestic products in six out of the 10 economies of Asia, excluding Japan, has risen.
Major economies — China, Hong Kong, Korea, Malaysia, Taiwan and Thailand — have recorded the credit levels higher than their gross domestic product in 2006. “In six out of 10 economies of Asia, excluding Japan, domestic credit to GDP ratio has risen and six economies have domestic credit to GDP ratio in excess of 100 per cent,” Citigroup analyst Marcus Rosen said in the report.
Biggest rises in credit
For India, the credit to GDP ratio of 64 per cent in 2006 is at a comfortable level and much less than that of other major Asian economies. The country recorded a GDP growth rate of 9.4 per cent for the financial year 2006-07.
India has witnessed one of the biggest rises in credit of about 20.8 per cent from 2000 to 2006. Korea with over 29.2 per cent and China with 14.7 per cent are the other countries where big increases have been seen.
In Japan, the level is over 200 per cent, indicating that the debt is double the GDP, while in the Euro area it is 152 per cent, the report said. The report highlights the progression of domestic credits as a per cent of GDP over 3 time frames - 1995, 2000 and 2006.