As we approach India's April/May 2019 elections, the country faces a number of economic challenges but also great development opportunities.
Our CIO Insights Special in summary:
- India’s economy has now recovered from the twin reform shocks of goods and services tax implementation and demonetization.
- Fixed investment has been the key growth engine, due to the return of business confidence and rising capacity utilization due to strong domestic demand.
- Rural development prioritization has created fiscal pressures, and is also having an impact on monetary policy. The Indian rupee could fall further.
- We have a neutral view on Indian equities overall in the run-up to the 2019 elections, but see potential strategic upside and sectoral opportunities. We also have a neutral view on Indian credit.
- The three key post-election priorities are faster industrialization, "inclusive growth" through digitalization, and redefining international economic relations.