Conference Presentation, Panel
Asia Summit 2015 - Modi's Second Year: Realism After Optimism
- Indian GDP growth is projected between 7% and 9% for the current fiscal year, though Deutsche Bank forecasts 7.5% with a downward bias, while legislative reforms are unlikely until 2019 due to political constraints.
- Inflation is anticipated to remain 400 to 500 basis points below previous years, supported by rail rates staying in positive territory exceeding levels seen over the past five to seven years.
- Foreign exchange reserves are expected to rise to a range of $500 to $600 billion, potentially requiring an additional $100 billion augmentation over the next couple of years by the Reserve Bank of India.
- The rupee is forecast to trend toward appreciation but remain within a 66 to 68 USD corridor, with sharp appreciation or a free fall considered low probability events due to central bank intervention.
- China's economy is expected to slow within the high six range in 2016 before returning to 7.2% growth in the second half of the year, with its currency stabilizing around current levels for the next 18 months.
- Chinese property markets in tier-one cities are expected to stabilize, while the services sector is projected to drive growth through mass entrepreneurship and innovation within 12 to 18 months.
- India's e-commerce retail share stands at 5 to 6%, with major internet companies expected to emerge as global players in 3 to 5 years and FinTech identified as the subsequent innovation wave.
- Mining sector activity is expected to increase with upcoming ore auctions, while a bankruptcy code is deemed imperative for public sector bank rejuvenation and a skill gap is anticipated to close over five years.
- Demographic risks include a potential shift to a demographic disaster without annual investments creating 15 million jobs, which may fuel continued social unrest driven by employment concerns.
- Trust-building between Indian and Chinese entrepreneurs is not expected to enable profitable joint ventures for at least a decade, while many startups may delay public market listings for 3 to 4 years in favor of private capital.
- If the current political leadership completes two terms, the Indian economy is projected to reach a $5 trillion valuation by 2024.