Government announcements for the building of new roads, railways, and other capital expenditure (capex) projects may have hit an all-time low, according to numbers for the December quarter.
The general elections in April/May 2024 are expected to add volatility to the Indian markets, keeping investors on their toes.
Foreign portfolio investor (FPI) flows into India may remain tepid in 2022, said a recent note by Goldman Sachs, who now peg the foreign portfolio investment into India at $5 billion in 2022, down from their earlier forecast of $30 billion with risks skewed to the downside. "There has been $15 billion of equity outflows YTD in India already, and the IPO of the largest insurance company has been pushed out. "Additionally, with no mention of India's inclusion in global bond indices in the Union Budget, there are risks to our already conservative base case assumption of an announcement of India's likely inclusion into the GBI-EM Global Diversified Bond Index in Q4-2022," wrote Andrew Tilton, Goldman Sachs' chief Asia-Pacific economist in a co-authored report with Santanu Sengupta and Suraj Kumar.
The current slowdown has lasted for over 18 months and is the longest incident of sluggishness since 2006.
The bond market expects at least 25 basis points cut in the June 6 policy.
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