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The stock market broke through 4 trillion! GDP exceeded expectations! Is India going to take off?
Dec 11,2023
Recently, India released a number of data, includingIndian stock market value breaks through for the first time4 trillion the US dollar mark; in the three months to September, India's gross domestic product (GDP) grew 7.6 per cent year-on-year. Based on these two strong figures, experts predict that India will soon become the world's third largest economy.
Indian stocks break through$4 trillion mark
According to the Caixin News Agency, the Indian stock market has performed outstandingly recently under the influence of strong domestic macroeconomic data and the expected relaxation of global interest rates.
Since the beginning of this year, the Indian stock market has continued to rise, and it is one of the best performing stock markets in Asia and even emerging markets. The main benchmark stock indexNifty50, the year-to-date increase has exceeded 13%. On December 6, driven by financial stocks and energy stocks, the market value of the Indian stock market broke through for the first time.4 trillionDollar mark.After the United States, China and Japan.
According to Bloomberg statistics, fromSince the low point of the epidemic in March 2020, the market value of securities listed on India's two exchanges has tripled. If the current rally is maintained until the end of the year,India's stock market is set for an unprecedented eight-year streak of gains.
Last weekend, Indian Prime Minister Narendra· India's benchmark NSE Nifty 50 index rose 2.1 percent to a record closing high on Monday after Modi's ruling Bharatiya Janata Party won three key state elections. Tuesday extended the rally to 20855.10 points.
In addition, IndiaThe Sensex index closed up 2.05 per cent at 68865.12 points, also a record high.
third quarterGDP growth exceeds expectations
A report released last Thursday showed that asIn the three months of September, India's gross domestic product (GDP) grew 7.6 percent year-on-year, higher than economists expected. The figure is also significantly higher than the Reserve Bank of India's 6.5 percent forecast.Prior to the first fiscal quarter (April-June) GDP was 7.8 percent.
Based on this, Barclays and Citigroup have given their latest forecasts, which they believe will be up to next year.India's economy will grow by 6.7 per cent in the 2023-2024 fiscal year in March, up from 6.3 per cent and 6.2 per cent previously forecast.
In addition, Wall Street's big bank Morgan Stanley will also India.The GDP growth forecast for fiscal year 2024 was revised up to 6.9 percent from 6.4 percent.
S & P Global raised its forecast before the latest data was released. India's economic growthWillIt depends on whether it can successfully transform from a service-oriented economy to a manufacturing-oriented economy.
India will become the world's third largest economy
For the long-term trend of the Indian stock market, many analysts are also very optimistic. The company is one of the largest investment firms in the world, and its CEO Stephen• Bird predicts that,India is expected to become the world's third largest economy in the next decade.Its stock market capitalization could increase fourfold or more by 2050.
Rating agency S & P Global also said in a report,India will remain the fastest growing major economy for at least the next three years,AndIt will become the world's third largest economy by 2030.
The agency expects India, currently the world's fifth-largest economy, to grow at a rate6.4 per cent, which is expected to rise to 7 per cent by fiscal year 2027. By comparison, China's economic growth is expected to be 5.4 percent this year, slowing to 4.6 percent in 2026.
And this strong data itself is based on last year's rapid growth. Data shows India achieved a record in the second quarter of last year.20.1 percent year-on-year growth.
S & P's forecast is based on a number of economic supporting factors in India: India's trade and financial liberalization, labor market reform, and India's ongoing investment in infrastructure and human capital.
"This is a reasonable expectation for India, which still has a lot of room for 'catch-up' in terms of economic growth and per capita income," said Dhiraj Nim (Dhiraj Nim), an economist at ANZ Banking Group Research. India's reforms in some areas have already begun to be implemented.
he particularly stressed,The Indian government has promised to provide more financial support in the future.
India's ambition to build a manufacturing powerhouse
S & P Global in itsThe Global Credit Outlook 2024 report released on December 4 states:"Whether India can become the next global manufacturing hub will be a major test, and this is a huge opportunity.”
The Indian government clearly has ambitions to boost India's economic growth. S & P analysts said that the Indian government's goal is to become an investment focus and manufacturing powerhouse for foreign investors, and their main means of achieving this goal is through.The "Production Linked Incentive Scheme (PLIS Scheme)" promotes the development of manufacturing and exports.
However, India still faces some headwinds on its growth path.
Morgan Stanley believes that,The biggest risk factor may be a mid-to long-term recession in the global economy.Because India is an economy highly dependent on international trade, its recent20% of economic output is exported. The Indian Ministry of Finance said last week,The global economic slowdown may affect the outlook for India's export business.
While other risk factors includeInadequate supply of skilled labor, adverse geopolitical events and missteps in government decision-making.
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