In the year 2010, the global real GDP growth was just 3.9%. The so-called advanced economies grew just 1.6% in 2011 and emerging and developing countries recorded a growth of 6.3%. China’s GDP is likely to record 9.2% growth in 2011 as against 10.4% in 2010. India’s economic growth in 2011-12, on the other hand, is now expected to be 7.5 per cent – 1 percent down from the previous fiscal and 1.5% less than predicted. The industrial output in most economies is facing a downward trend. The fastest growing China has already begun to rebalance it’s economy to promote greater private consumption, reduce reliance on exports, and to encourage knowledge-based, high-tech industries in order to deal with the rising labour costs and carbon emissions.Everyone is eager to know “what will 2012 bring”. People are cautious in welcoming the New Year. The world economy faces exceptional – perhaps even unprecedented – uncertainty and financial instability as it enters 2012. There is hardly any rebound in output among developed countries of Eurozone and also in the US. Instead, they have collectively launched fiscal austerity measures. No more stimulus programmes appear to be coming in. It is feared that this will lead to one of the most severe fiscal contractions further deteriorating the global financial conditions. Germany and France cannot continue bankrolling the weaker economies (such as Greece, Ireland, Portugal and Spain) forever. There are potential risks of breaking up of the EU. The US also cannot be expected to rely on Chinese dollars. The days of ‘cheap money’ are certainly over for these seemingly rich countries.
|Total Textile & Clothing Exports Data|
|2005-06||US$ 17.52 bn|
|2006-07||US$ 19.15 bn|
|2007-08||US$ 22.15 bn|
|2008-09||US$ 20.94 bn|
|2009-10||US$ 22.44 bn|
|2010-11||US$ 26.80 bn|
|2011-12||US$ 32.35 bn (target)|
Globally, there are real fears of sovereign risk. With the chances of prominent global banks, and even countries, going bust some nasty sovereign debt shocks could be in store for us to witness in near future. The outlook for developing/emerging economies – including India and China – is also full of unpredictable risks due to the complex nature of the global financial structure. Whether we like it or not, one thing has become clear that uncertainty, instability, fear and mistrust have become the hallmarks of today’s global business environment.
Now let’s come to the textile industry, which we are all involved with. In view of a highly uncertain & unpredictable future, a peep into the past can perhaps be more worthwhile at this juncture. Let some facts&figures speak for themselves.