India’s economy could take a sharp upturn to 7.1 per cent in FY2021 from 5.7 per cent in FY2020, Bloomberg Economics has said. The report said the structural measures taken by the Modi government to boost the economy would play a crucial role in bringing in foreign indirect investment, which would be crucial for India in times of trade wars. “We expect gross domestic product growth to rise sharply in fiscal 2021 ending March, to 7.1 per cent from an estimated 5.7 per cent in fiscal 2020,” said the report.
On a quarterly basis, Bloomberg expects growth to remain flat at 5 per cent in the second quarter of fiscal 2021 ending September. The GDP is expected to recover to 6 per cent in the third quarter and rise to 6.8 per cent in the fourth quarter ending March 2021. The US-China trade war has created a sense of fear among companies, and India could emerge as an alternative for foreign investments, the report says. “This is likely to boost private investment and has the potential to attract greater foreign investment over the next few years, just as the US-China trade war is prompting global manufacturers to rethink their supply chains.” Click to read more.
The year 2019, a year filled with hot headlines such as heatwaves in a desert. The economic downturn and fear of recession were the top concerns amongst smart money and family offices. These concerns were on the back of the tumultuous trade war between the U.S. and China. This trade war kept the global central banks on their toes and they took a weapon of mass protection out, once again—the dovish monetary policy.
This monetary policy drove bond yields to the ground, the Treasury yields in the U.S. touched levels that haven’t been witnessed in decades. The feeble global growth and lower bond yields have shifted the investment focus among family offices and High Net Worth (HNW) individuals. They struggled to find bonds with positive yields and the scarcity of these assets altered their investment strategy. They have started to favour “impact investing”.Click to read more.
Private equity (PE) and venture capital (VC) investments in India more than doubled to $4.8 billion in November from $1.8 billion in the year earlier, according to a report by the Indian Private Equity and Venture Capital Association and consulting firm EY. In the 11 months to 30 November, PE/VC investments in the country rose to $44.2 billion, 18% more than the previous high of $37.4 billion recorded in 2018. “PE/VC investments in 2019 have clocked over $44 billion till date and could end up at $48-50 billion mark for the year. This is a very significant figure, with PE/VC investments at 1.7-1.8% of GDP, we are almost on a par with China and the global average for PE/VC investments to GDP ratio,” said Vivek Soni, partner and national leader (private equity services) EY. Click to read more.