Global financial services major Goldman Sachs sees India’s GDP growth rate bouncing back to 7.6% in the current financial year itself, and to 8% in FY19, a significant jump from a three-year low GDP growth a quarter ago. Interestingly, Goldman Sachs also expects the 50-share Nifty to return up to 16% in the year. Andrew Tilton, chief Asia-Pacific economist for Goldman Sachs Group Inc says that India’s economy could prove to be stronger than expected as the shock from structural reforms such as demonetisation and introduction of GST begin to fade. “The good thing about next year is we don’t think we’re going to get those shocks again,” Andrew Tilton of Goldman Sachs said in an interview to Bloomberg. Timothy Moe, chief Asia Pacific regional equity strategist at Goldman Sachs says that growth will be the chief driver for India. Goldman Sachs has retained its one-year Nifty target at 11,600. Nifty was trading at 10,329 points on Wednesday morning.
In fact, Morgan Stanley, another global firm, says that India’s economy will grow by more than 10% annually in the coming decade, buoyed by demographics, reforms and globalization. According to Morgan Stanley, India, which was already on its way to growing at a brisk pace over the next decade, has found excellent growth triggers due to two major initiatives—digitizing its predominantly cash-based economy and reforming its archaic tax system— “which have the potential to amplify India’s expansion, making it one of the world’s fastest-growing large economies over the next 10 years,” says the report.
CLSA too reiterated its bullish on India in a recent report. CLSA said, “Investors are turning positive in India, as they believe that the worst is over in terms of poor corporate earnings. The government’s pro-growth stance is visible in PSU bank recapitalisation.” Just last week, Moody’s raised India’s sovereign credit rating by one notch to Baa2 from the lowest investment grade of Baa3, saying that the reforms being pushed through by Narendra Modi’s government, especially the GST, will help stabilise rising levels of debt. The rating upgrade puts India in line with the Philippines and Italy.