However, there is a need to increase their credit absorptive capacity as a large number of SHGs linked to the banking system are utilising the credit only for consumption purposes. They have to migrate to employment generating activities so as to be able to fully reap the benefits of economic freedom.
Although recent exchange rate developments are likely to have some dampening effects on exports, export growth should continue to benefit from the dynamic expansion of the world economy. Import price developments in the euro area should become somewhat more favourable, thereby helping to contain inflationary risks.