A "Bold Forecast" By JP Morgan, India Will Become Third Largest Economy By 2027
J P Morgan, US’ biggest bank, made a “bold forecast” that India will become the third largest economy in the world. The bank’s managing director of Asia Pacific equity research, James Sullivan made the prediction that India will jump two steps ahead of its current position and by 2027 and will double over to $7 trillion by 2030 with its GDP. Currently, India is the fifth largest economy behind Germany, Japan, China, and the US economy.
While talking to CNBC TV18, Mr. Sullivan said that observing from the structural perspective, “very strong long-term tactical drivers make India “a key overweight”. He said, “from a longer-term perspective, we see massive changes in the overall structure of the Indian economy, which present clear opportunities for sector selection within what we think will be a strong overall market”.
Pointing to China’s below average earnings revision, Mr. Sullivan observed the country is going at a never before pace since 2005. He suggested that with such a pace it is highly likely that China would reach at an inflexion point in its economic trajectory. He said such changes can bring China under the “keen interest” of the investors.
Mr. Sullivan’s came under the light of International Monetary Fund’s (IMF) forecast on the India’s GDP growth foe the year 2023-24. According to the World economic outlook report by multilateral agency, which was released on October 10, India’s GDP will show a 6.3 percentage growth which is 20 point higher than what it had been predicted it July.
According to analysts of Barclays, India’s GDP growth is expected to lag even if it still continue to outpace Chine for the next five years. The report said that India will have to produce 8 percent growth in its GDP even it out pace China in the economic projections. While the report agree that India has displayed an excellent performance economically ,while compared to the rest of the world, it raises a question of whether the country can “encourage more rapid growth without compromising India’s hard won macro stability that has dominated India’s growth ambitions since the start of the Ukraine-Russia war”, as said by the Money Control.
The Barclays report appreciate India’s “remarkable” turnaround in its economic projection which happened within a decade of being listed among the “fragile-five” who were facing a “significant macro instability”. The report also said that while when compared with the country’s historical levels, “amid considering the economic turbulence in the rest of the world, India has been an island of relatively better macro outcomes in the past two years”.
