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See strong recovery in India, expect GDP to grow 10% next year, says Nomura

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See strong recovery in India, expect GDP to grow 10% next year, says Nomura

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Nomura expects rupee to strengthen against the dollar, said Rob Subbaraman, Chief Economist, Asia Ex-Japan on Friday.

Nomura expects rupee to strengthen against the dollar, said Rob Subbaraman, Chief Economist, Asia Ex-Japan on Friday.
“We have a forecast of a very strong India recovery next year, we forecast almost 10 percent real gross domestic product (GDP) growth for India next year,” he said in an interview with CNBC-TV18.
In terms of dollar index, he said, “Our view at Nomura is that it still has a room to weaken further and we think in particular as we look into 2021, in the first quarter of 2021, it is going to be a sharp dive down in the dollar.”
Market is pricing things earlier now, Subbaraman added.
“In the second half of the year 2021, we see a synchronised global expansion with importantly still very low inflation. That is what markets are starting to price now. They are pricing things earlier and earlier and they are looking through the double dips and looking to that to synchronise expansion of low inflation in the second half of the year,” he said.
“If we get inflation surge, it is quite possible that it happens in 2022,” he said.
“One of the big risks for markets is that they start to get the sniff that inflation is coming and we start to see bond yields in particular rising in the second half of next year. Inflation rise or inflation surge is probably going to be the most dangerous outcome for the global economy because then the central banks have to decide do we raise rates and try to bring inflation down,” Subbaraman said.
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