India may see pivot to 8% growth post elections: Barclays
India towards a higher 8% growth, which will help overtake China as the biggest contributor to global growth, according to the latest Barclays research.
“India is set to remain the fastest-growing major economy for some time. However, post general elections, the policy may tilt towards even faster economic expansion… targeting 8% could see it overtake China as the biggest contributor to global growth,” said Rahul Bajoria, Head of EM Asia (ex-China) Economics, Barclays.
The study pointed out that India is likely to become an $8 trillion economy by 2030 if it achieves a higher growth rate, compared with the $6.6 estimated at 6.1% growth by the IMF.
As per IMF, India will become the third largest economy by 2027, when it crosses the $5-trillion economy mark.
An increase in the nominal savings rate, faster growth in the workforce, higher female labour force participation and more exports will be needed to sustain growth for the rest of the decade, Barclays economists stated.
The Indian economy expanded 7.8% in the first quarter of FY24, but experts indicate that growth is likely to slowdown in the coming quarters. A poll of 22 economists had put the median growth estimate for FY24 at 6.2%.
“A key question is whether authorities can encourage more rapid growth without compromising India's hard-won macro stability,” Bajoria said, stating that achieving 8% growth consistently has been difficult.
India’s economic growth averaged 8% between 2005 and 2010.
Brighter future
“The more proactive push to increase manufacturing, with friend-shoring, clean corporate and financial balance sheets, better control over inflation, a sophisticated digital footprint and a large infrastructure build-out, should provide an additional stimulus to
