‘US recession could hit global markets’

Hyderabad, May 4 :

A slowdown in the US may trigger a worldwide recession that if “disorderly” will hit emerging market economies hard, India’s finance minister warned on Thursday.

Palaniappan Chidambaram, speaking at the 39th annual meeting of the Asian Development Bank, said global economic growth continued to depend heavily on the US economy.

“A possible slowdown in the US economy may trigger a worldwide recession,” Chidambaram told delegates at the seminar on global payment imbalance in the high-tech southern Indian city of Hyderabad.

“Any abrupt and disorderly adjustment in the global imbalances will result in volatility with direct implications for the emerging market economies,” Chidambaram said.

He said global imbalances were reflected in large mismatches in the current account, or trade balance, of many countries.

The US current account deficit was a record 805 billion dollars in 2005 or 6.4 per cent of its gross domestic product and is expected to grow as oil prices soar, he said.