India's Economic Revival: An Optimistic Horizon
India's economic growth is poised for a rebound, supported by favorable macroeconomic factors such as workable interest and liquidity cycles, decreasing crude oil prices, and a normal monsoon, according to HSBC Mutual Fund. Despite global trade uncertainties, medium-term investment prospects remain promising, driven by infrastructure and private sector initiatives.
- Country:
- India
India's economic growth trajectory may be reaching a turning point, buoyed by a mix of advantageous macroeconomic elements, including interest rates, liquidity cycles, falling crude oil prices, and predictions of a normal monsoon season, as stated in a report by HSBC Mutual Fund. The paper underscores these conditions as potential catalysts for an uptick in growth in upcoming quarters.
According to the report, while global trade uncertainties could pose challenges to private capital expenditure in the near term, optimism remains high regarding India's future investment landscape. Sustained governmental commitment to infrastructure and manufacturing, growing private investment, and a resurgence in the real estate market are expected to drive an upward shift in the country's investment cycle over the medium term.
Further bolstering economic growth prospects, the report highlights increased private sector investments in renewables and related supply chains, the localization of advanced technology components, and an increasingly significant role for India in global supply chains. Despite recent gains pushing Nifty valuations to a premium, HSBC Mutual Fund maintains a positive outlook on Indian equities, citing a strong medium-term growth forecast, albeit amidst global macroeconomic challenges.
The report also sheds light on possible setbacks, including the impact of reciprocal tariffs announced by the US administration, which could hamper both US and global economic performance. Nevertheless, it reveals a surge in India's GDP growth to 7.4% year-on-year for Q4FY25.
Addressing the slump in private consumption, recent government measures, such as income tax rate cuts introduced in the Union Budget, are acknowledged. With the US dollar depreciating and oil prices dropping, the report suggests an increased scope for policy easing. Additionally, an above-normal monsoon prediction is expected to bolster rural demand, reinforcing the economy's positive outlook. (ANI)
(With inputs from agencies.)
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