India’s economy is expected to continue its strong growth trajectory, with real GDP growth in FY2024 projected to be higher than the long-term average, according to a report by Client Associates (CA).
The Gurugram-based wealth management firm, which has assets under advice of $5.3 billion, has projected India’s GDP growth at 6.50 per cent for FY24, against the long-term (10-year) average of 5.90 per cent.
Rohit Sarin, co-founder, CA, underscored that India has been performing well when compared to global counterparts, with projections indicating a sustained growth rate of 6 per cent or more in both FY24 and FY25
Over the past decade, India has been the second-fastest-growing economy globally, trailing only China.
Sarin said India’s resilience is attributed to favorable policies, strategic global supply chain shifts, and substantial government commitments to infrastructure spending, all contributing to the vibrancy of India’s economy.
“India holds a unique position with current bond yields aligning closely with historical averages. Notably, the projected (10-year) bond yield of 6.75 per cent for FY25 is anticipated to be well below its 10-year historical average (of 7.20 per cent), setting India apart from major economies like the US and Euro Zone,” said Sarin.
Current and projected inflation rates for FY’25 are well below the 10-year average, showcasing India’s adept handling compared to other developed economies facing significantly higher inflationary pressures, per the report.
Diversification
In a comprehensive diversifier analysis, India emerges as a key player in both developed and emerging markets, underscoring its role as a strategic investment destination, offering an appealing risk-return profile, according to CA.
Sarin emphasised that investors worldwide stand to gain notable diversification benefits by including Indian equities in their portfolios.
India’s impressive 5-year average rolling return of 8.9 per cent outshines developed markets like Japan (5.8 per cent), UK (3.1 per cent), France (4.4 per cent), and Germany (5.2 per cent).