Most discussions about the economy's woes focus on the external sector: a high current account deficit/gross domestic product ratios, dwindling foreign investment inflows, rupee depreciation and debt repayment that will be due near the end of the fiscal year.
After the frantic expansion of the economy during the years 1946 1949 of Peron's first term, a crisis in the external sector in 1949 forced major changes in the economic policy; initially the expansion of the public sector was held back while attempts were made to retain the policy of increasing wages.
However, the external sector is a manifestation of what's going wrong domestically.
THE Indian finance ministry's mid-year review, released this week, sees the external sector as a silver lining around the country's huge fiscal deficit.
The external sector thus is a key ingredient in the Spanish experience during the bubble years, one that deserves further study.
Activities of an external corporate sector include, by contrast, communication with business partners and customers, product marketing, distribution, logistic, delivering, and maintenance.
The actions are all understandable because a crisis will always be in the external sector through the balance of payments, which includes trade and foreign investments.
"Whilst an upside surprise at 5.5%, the pace of growth is undeniably below potential and validates the need for the government to address sluggishness in investment and external sector activity," said Radhika Rao an economist at Forecast Pte.
"Although capital inflows, mainly in the form of portfolio investment and debt flows provided adequate financing, the growing vulnerability of the external sector to abrupt shifts in sentiment remains a key concern," the central bank said.
The performance of Spain's external sector during the early years of the euro is a critical ingredient to understand the dynamics of the crisis.
The French national statistics agency Insee said the modest growth was mainly driven by the external sector, with exports increasing 3.9 percent, while imports rose 2 percent.
