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India’s economy needs a strong boost

International Monetary Fund, banks and ratings agencies were all predicting an impressive double digit rebound growth for India but due to the sudden spike in corona cases has made investors in bewildered states. This has not just affected India’s health system but many workers in informal sectors are facing severe crises. Societe Generale estimated withdrawal of $6 billion by international investors from India in the month of april. This also includes bond market selling.
The credit rating agency Fitch has estimated the government’s fiscal deficit to be nearly double to 14% of GDP this year and push India’s debt to GDP ratio over 90%. The government has already eased stringent foreign ownership limits that had been a big hurdle for inclusion. Analysts say it is also likely to need to be part of the key Euroclear ecosystem where buying and selling bonds is easier. Firms Like Asia and global emerging markets are tentatively looking at some beaten down Indian shares again while some are hopeful about the growth of the domestic bond market.

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