Finance Finance

Posted by admin on 2024-02-22 |

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Jefferies, a prominent global brokerage, asserted on February 21st that India is poised to ascend as the third-largest economy by 2027, buoyed by a confluence of factors including consistent GDP growth, favorable geopolitical dynamics, burgeoning market capitalization, ongoing reforms, and a robust corporate ethos.

Mahesh Nandurkar, an India Equity analyst at Jefferies, delineated India's economic trajectory over the past decade, noting a commendable 7 percent Compound Annual Growth Rate (CAGR) in GDP, propelling it from the eighth to the fifth largest economy globally, with a current GDP of $3.6 trillion. Anticipating further growth, Nandurkar projected India’s GDP to reach $5 trillion by 2027, surpassing Japan and Germany, driven by demographics, institutional strengthening, and improved governance.

Highlighting India’s historical growth rates of 10-12 percent in USD terms over the last two decades, Nandurkar emphasized India's ascent as the fifth-largest equity market globally, with a market capitalization slated to touch $10 trillion by 2030. He attributed India’s resilience as the fastest-growing large economy to sustained reforms, citing initiatives such as GST implementation, bankruptcy reforms, and the Real Estate Regulation Act, which have streamlined taxation, cleansed corporate balance sheets, and revitalized the housing sector.

Moreover, Nandurkar underscored India’s potential for continued growth, supported by a conducive global geopolitical environment, characterized by robust diplomatic relations and strategic alliances. He highlighted India’s status as a haven for entrepreneurship, with a burgeoning startup ecosystem and a surfeit of unicorns, underpinned by government initiatives and a burgeoning digital infrastructure.

India’s burgeoning services export sector, worth nearly $450 billion annually, was also lauded, with numerous global corporations leveraging India’s skilled workforce and digital infrastructure. Nandurkar commended India's RoE-focused corporate sector and strong institutional framework, fostering investor confidence and sustainable investment habits, which he anticipates will sustain market valuations and mitigate volatility.

In conclusion, Jefferies’ bullish outlook on India’s economic trajectory hinges on its steadfast growth trajectory, underpinned by reforms, geopolitical stability, entrepreneurial vigor, robust services sector, and a conducive corporate environment, positioning it for ascension as a global economic powerhouse.