South Asia continues dramatic economic rise

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01 December 2007

South Asia remains attractive to investors. India and Pakistan, the region's two powerhouses, have undergone dramatic growth in recent years. Dickon Harris examines the effect of currency fluctuations, political turmoil and how high commodity prices have been influencing trade.

"It is a good time to be a banker in India," confides one senior banker. It is not hard to see why the financial sector is feeling pleased with itself. Both India and Pakistan have enjoyed strong GDP growth. India's GDP growth is forecast to grow at 8.9% for 2008 while its direct foreign investment last year equalled $19.5 billion. As Jimmy Tata, head of corporate banking at HDFC, states: "Things are definitely robust. The next few years look good. Everyone is doing well here. The SMEs are doing well; the large corporates are doing well. In fact, everyone has ended up with pretty good growth figures."

Commodities The largest share of imports remains oil. The region is still a net importer of oil, and oil imports to India were approximately $57 billion dollars this year. High oil prices have encouraged a spate of expansion and refinancing in the...

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