Tue Sep 10 00:52:00 UTC 2024: ## India’s Economic Growth Remains Strong Despite Global Challenges: DSP Asset Managers

**MUMBAI, INDIA – September 10, 2024** – India continues to be a bright spot in the global economy, achieving over 8% growth, according to DSP Asset Managers’ August 2024 report, DSP7Sees. This robust performance is attributed to a combination of factors, including an expanding budget deficit that has fueled economic expansion and effective policy implementation by the government and the Reserve Bank of India.

Despite this positive outlook, the report warns that strong economic growth doesn’t always translate to high equity returns. While India’s real returns have lagged behind real GDP growth, it stands out as an exception among emerging markets.

A key driver of India’s economic success is household consumption, which accounts for 60% of its GDP. This sector has witnessed significant growth over the past three decades, reaching $2 trillion from $200 billion, reflecting a compound annual growth rate of 7.2%. Maintaining this momentum is crucial for boosting domestic investment and attracting foreign capital.

India’s stock market has also experienced a remarkable bull run since the COVID-19 pandemic, with corporate earnings tripling compared to its emerging market counterparts. This surge has led to India’s weight in the Emerging Market Index doubling, making it a strong contender to surpass China as the leading market in the index and attracting increased interest from Foreign Institutional Investors (FIIs).

The report further emphasizes the robust growth of India’s business services exports, which reached $29 billion in FY24, with a five-year CAGR of 86%. This expansion, particularly in business consulting services, has significantly strengthened India’s balance of payments. Inflows into India’s debt market, fueled by its inclusion in global bond indices, provide an additional buffer against global economic shocks, enhancing the country’s economic stability.

DSP Asset Managers conclude that India remains a steady ship navigating turbulent waters, demonstrating resilience and strong economic fundamentals despite global challenges.

Read More