Though yesterday's election results are a big positive for markets as they indicate expectation of stability, there are still some major concerns -
1. Rupee Depreciation: It has helped exporters but one can not overlook India's imports, especially oil. Everyone has seen the drastic impact of Rupee's recent fall on equity markets.
2. Inflation: It is staying at a very high level and can spoil the growth of market. RBI has not given any signs to lower rates which is desparately needed by the industry. If inflation does not come down, it will be tough to lower rates and without that, industrial growth can not pickup.
3. Current Account Deficit: It has come down sharply to 1.2 percent of GDP, in the July-September quarter of this fiscal. It was helped by decline in gold imports (due to rise in import duty) and turnaround in exports. More subsidies will further deteriorate CAD. Another grave threat is in form of capital account outflow of Dollars in wake of a resurgent American economy. A revival there threatens to suck capital, and economic dynamism, out of many emerging-market economies.
4. Oil Prices: India imports some 80% of its oil requirements and any big rise in crude oil price will destabilize our economy. India will be the largest source of oil demand growth in world after 2020, and by 2035 it will be the second largest oil importer after China. Now oil is increasingly becoming more and more critical for our economy and rising tensions in gulf countries is a big threat.
As an investor, one must understand the importance of these issues and should be analyze whether these issues will block India's growth or not. Contact us to know the answers and invest without stress.
1. Rupee Depreciation: It has helped exporters but one can not overlook India's imports, especially oil. Everyone has seen the drastic impact of Rupee's recent fall on equity markets.
2. Inflation: It is staying at a very high level and can spoil the growth of market. RBI has not given any signs to lower rates which is desparately needed by the industry. If inflation does not come down, it will be tough to lower rates and without that, industrial growth can not pickup.
3. Current Account Deficit: It has come down sharply to 1.2 percent of GDP, in the July-September quarter of this fiscal. It was helped by decline in gold imports (due to rise in import duty) and turnaround in exports. More subsidies will further deteriorate CAD. Another grave threat is in form of capital account outflow of Dollars in wake of a resurgent American economy. A revival there threatens to suck capital, and economic dynamism, out of many emerging-market economies.
4. Oil Prices: India imports some 80% of its oil requirements and any big rise in crude oil price will destabilize our economy. India will be the largest source of oil demand growth in world after 2020, and by 2035 it will be the second largest oil importer after China. Now oil is increasingly becoming more and more critical for our economy and rising tensions in gulf countries is a big threat.
As an investor, one must understand the importance of these issues and should be analyze whether these issues will block India's growth or not. Contact us to know the answers and invest without stress.
No comments :
Post a Comment