India's status as the bright spot in an uncertain global economy is seemingly getting brighter as key global voices have weighed in with their bullish hopes about the future of the economy.
In a report titled 'Look Forward: India's Moment', global data, research, and analytics firm S&P Global said "everyone is watching India" at a time when the world is in the midst of disruptions.
"The trillion-dollar question is whether India can sustain high growth… Our answer to the sustained growth question is a conditional 'yes'," S&P Global said in its report, released on August 3.
"We expect India to grow 6.7 percent per year from 2023-24 to 2030-31, catapulting GDP to $6.7 trillion from $3.4 trillion in 2022-23. Per capita GDP will rise to about $4,500," the agency added.
The thumbs-up from S&P Global came hours after Morgan Stanley upgraded its view on India to 'overweight' – even as it downgraded China to 'equal weight' and Australia to 'underweight' – as it thinks the country is poised for substantial and sustained economic growth at a time when the rest of the world is slowing down.
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"Multipolar world trends are supporting FDI (Foreign Direct Investment) and portfolio flows, with India adding a reform and macro-stability agenda that underpins a strong capex and profit outlook," Morgan Stanley strategists said on August 3.
S&P Global and Morgan Stanley are not alone in expressing their bullishness about the Indian economy. On July 25, the International Monetary Fund (IMF) raised its GDP growth forecast for India for 2023-24 by 20 basis points to 6.1 percent, citing the momentum from the blowout growth number for January-March.
The Indian economy posted a GDP growth rate of 6.1 percent in January-March, beating the consensus estimate by a full 100 basis points.
One basis point is one-hundredth of percentage point.
Adding to the gloss was data released earlier today on August 3 by S&P Global, which showed India's services Purchasing Managers' Index surged to 62.3 in July – the highest in over 13 years.
Bullish optimism
Chatter on India's economic performance has been getting louder in recent weeks in the lead up to the G20 Leaders' Summit that will be held in New Delhi on September 9-10 under India's Presidency. Speaking on the sidelines of the meeting of G20 Finance Ministers and Central Bank Governors in Gandhinagar on July 17, World Bank President Ajay Banga said he is more optimistic about India's growth prospects now than he has been "in a long time".
In a report released on July 19, Standard Chartered Bank said it expects India to become the world's third-largest economy by 2030 and have a GDP of $6 trillion, with macroeconomic stability being the "linchpin" of the country's medium-term growth story.
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"However, fast-paced action is required to increase both employment opportunities and employability of the young population, especially in the age of AI (artificial intelligence)," Standard Chartered Bank's economists said, adding that additional steps to address job creation, physical-social infrastructure gap, income inequality, and climate challenges could further boost growth prospects.
State Bank of India's research team has gone a step further, saying India will likely become the world's third-largest economy in 2027-28 - two years earlier than its previous projection of 2029-30.
"To achieve the 3rd place India needs to grow by CAGR (compounded annual growth rate) of 8.4 percent till 2027 (in dollar terms). This translates into 11-11.5 percent nominal GDP growth per annum (in rupee terms), which is achievable," Soumya Kanti Ghosh, SBI's group chief economic adviser, wrote in a July 27 report.
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