India PM says global recovery still fragile

Indian Prime Minister Manmohan Singh warned Friday that the global economic recovery was still fragile as he headed for a G20 summit of world leaders in Canada.

Singh's warning came as European countries including Britain, France and Germany press ahead with stiff spending cuts despite US fears that slashing budgets too quickly could threaten the nascent pick-up in growth.

The Indian leader said coordinated policy actions taken by the Group of 20 rich and emerging nations since the first summit in Washington in November 2008 had helped prevent a repetition of the deepest recession since the 1930s.

The actions have "also contributed to global economic recovery. This is a sign of the G20's success. At the same time, we have to be conscious that the recovery is still fragile and uneven," Singh said.

"New worrying signs have emerged in the eurozone," Singh said, referring to the eurozone public debt crisis that has engulfed Greece and threatens other overspending European countries.

The G20 summit, whose theme is "Recovery and the New Beginning," takes place in Toronto on Saturday and Sunday.

Singh said the summit should aim to ensure that global recovery is durable, balanced and sustainable.

The meeting should also calibrate exit strategies from expansionary fiscal policies and work on overhauling the global financial system to ensure that the banking crisis which sparked the financial meltdown does not recur.

"As the Indian economy grows and further integrates with the international system, we have an increasingly direct stake in all these matters," Singh said.

"To meet our ambitious development targets it's necessary that the global economy continue to recover in a stable and predictable manner," he added.

Asia's third-largest economy grew by a better than expected 7.4 percent in the financial year ended March 2010 and is projected to grow by 8.5 percent in the current fiscal year.