India’s GDP Progress Set To Additional Enhance In 2nd Half This Yr, Market Volatility To Subside | Economic system Information
Mumbai: India’s GDP progress is ready to additional enhance within the second half this yr attributable to macroeconomic stability, supported by important international alternate reserves and a regulated twin deficit, in accordance with a Motilal Oswal Personal Wealth (MOPW) report launched on Wednesday.
The report expects India to proceed to be among the many highest rising main economies regardless of the latest slowdown in progress. Indian markets are anticipated to stay risky within the first half of 2025 attributable to a number of international and home occasions, together with the brand new Donald Trump administration’s insurance policies within the US, China’s measures to counter commerce tariffs and its attainable implications for rising market (EM) currencies, and the upcoming Union funds.
These occasions are anticipated to create uncertainty within the close to time period. Nevertheless, as these occasions unfold and better readability emerges, market volatility is predicted to subside within the latter half of the yr, the report confused.
“The post-covid interval has been extraordinarily rewarding to fairness buyers pushed by earnings progress, bettering macros and home inflows into equities,” stated Ashish Shanker, MD and CEO of MOPW.
The yr 2024 has been no totally different with broader markets doing extraordinarily properly. The mid cap and small cap section have outperformed the massive caps. Gold has additionally carried out properly as an asset class.
“The yr 2025 will carry its share of uncertainty as the brand new US president will get sworn in. After years of fine efficiency, the US markets additionally look drained. This requires moderation in expectations and a pointy give attention to danger administration via asset allocation,” stated Shanker.
MOPW recommends intently monitoring the upcoming earnings season and GDP progress trajectory. “We anticipate this development to reverse and anticipate massive caps to do higher this yr given the valuation consolation. In the long term, incomes progress and inventory returns ought to converge,” it recommended.
Regardless of potential short-term volatility, the medium-term outlook for Indian equities stays optimistic. This optimism is pushed by a number of components, together with India’s secure macroeconomic setting, seemingly enhance in authorities spending within the medium time period and bettering liquidity situations and financial stimulus by the RBI.
