India’s Economic Outlook 2017 Remains Bright
India’s economic outlook for 2017 is optimistic. It could be the only country among emerging economies that shows growth in 2017. When you look at all the economic data, India is performing well, and the trend suggests that solid economic growth could be ahead.
For instance, one factor that could mean economic growth ahead in 2017 is the foreign direct investment figures. Over the past several years, India has seen a significant amount of investments from other countries. In the fiscal year 2015-2016 (April 2015-March 2016), foreign direct investment increased 29%, from $30.93 billion to $40.0 billion. (Source: “Foreign Direct Investment,” India Brand Equity Foundation, last accessed October 6, 2016.)
Mind you, when it comes to foreign direct investment, India has taken over China. The country is getting hefty investments from outside for coal, oil, gas, and renewable energy projects. Consumption in the country is phenomenal as well and paints a bright economic outlook for India in 2017.
Consider sales in India as one example. Looking at the monthly level, in early 2006, about 100,000 cars were registered. In August of 2016, this figure reached 250,821. This represents an increase of more than 150%! (Source: “India Car Sales,” Trading Economics, last accessed October 6, 2016.)
Consumer confidence in India is solid as well. In the second quarter of 2016, India’s consumer confidence index tracked by Nielsen Global stood at 128. Any value above 100 suggests that consumers are optimistic, and any value below 100 suggests that consumers are pessimistic. India’s Consumer Confidence Index has remained above since at least 2011. (Source: “India Consumer Confidence” Trading Economics, last accessed October 6, 2016.)
Keep in mind, consumer confidence is a great indicator of consumer spending. If consumers are optimistic, they tend to go out and buy. With Indian consumers remaining optimistic, it suggests that the current situation could lead to more consumption, and this could give a boost to India’s gross domestic product (GDP).
Here’s what you also need to know: major global agencies and banks have issued optimistic views on India’s economic outlook for 2017 as well.
Currently, the global economy is struggling. Just recently, the International Monetary Fund (IMF) provided a growth forecast for the global economy. It says that, as a whole, growth is expected to be subdued at best in 2017.
But it did mention there’s one sweet spot: India. In its global growth forecast, the IMF said that India’s GDP is expected to increase 7.6% in 2017. The growth rate is expected to increase to 8.1% in 2018. (Source: “World Economic Outlook October 2016,” International Monetary Fund, last accessed October 6, 2016.)
Asian Development Bank (ADB) also expressed a positive economic outlook for India in 2017. It expects the country’s economy to expand 7.8%. (Source: “India: Economy,” Asian Development Bank, last accessed October 6, 2016.)
How to Profit As India’s Economy Grows?
For investors, there are several ways to benefit. One way could be to directly invest in Indian companies. This could mean more research time and less diversification. The other way to profit could be exchange traded funds (ETFs) like PowerShares India ETF (NYSEARCA:PIN). This ETF invests in Indian companies, and investors could get diversification through this.
Keep in mind that these are not recommendations to buy, but just examples of what kind of opportunities exist.