Homeeconomy News

    Nomura's Rob Subbaraman believes India will be 'back in the vogue' in 2HFY21

    economy | IST

    Nomura's Rob Subbaraman believes India will be 'back in the vogue' in 2HFY21

    Mini

    India's economic growth in the fourth quarter of FY20 as the country's financial problems, including a credit crunch, will continue to weigh on the economy, with high inflation making it worse, said Rob Subbaraman, head of global macro research, at Nomura.

    India's economic growth in the fourth quarter of FY20 as the country's financial problems, including a credit crunch, will continue to weigh on the economy, with high inflation making it worse, said Rob Subbaraman, head of global macro research, at Nomura.
    "Good news is that it (India) is less exposed to this coronavirus through Chinese tourism, through the supply chain effects on production and manufacturing than many other Asian countries," notes Subbaraman. On the other hand, India has its own idiosyncratic constraints on growth, which he thinks, are going to continue to be a headwind for a few more quarters.
    Subbaraman believes India will be back in vogue in the second half of the new financial year 2021. "Out of the big EM economies, India is still one of the fastest growing and the structural problems are going to lessen as we get into the second half of the finical year,” he added.
    Subbaraman further mentioned that inflation is probably going to come off very sharply. "I wouldn’t be surprised if, by the October-December quarter of 2020, inflation is back towards the low end of the Reserve Bank of India’s (RBI) 2-6 percent inflation target. We are forecasting right now a rate cut in Q2 and the risk is of more rate cuts than just one,” he added.
    Saion Mukherjee, India equity strategist at Nomura, said the Budget 2020 could be an outright growth budget for some pockets and, for others, it could materially change the investor sentiment.
    "We didn’t get a major growth boost as such but I think there is some consistency in the policy where there is focus on an investment-led growth, there is a focus on getting or attracting foreign capital. That is something which India needs quite desperately at this point given where we are," Mukherjee said.
    Insurance sector got the most negative surprise in Budget 2020, Mukherjee added.
    Subbaraman  said, “To me, the encouraging thing in the budget was that the government didn’t go on big spending spree. They were focusing more on the investment and the longer-term. That is what the big asset management companies are interested in."
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    next story

      Most Read

      Market Movers

      View All
      CompanyPriceChng%Chng