Can India’s economy recover from the COVID-19 crisis?

COVID-19 has taken a heavy toll on India’s economy. But all is not lost, says Krishna Kumar, Portfolio Manager, Eastspring Investments. “Many investors underestimate India’s long-term growth potential. It is interesting to note that over the last twenty years, MSCI India actually outperformed MSCI China in USD terms, although the latter has seen stronger returns over the last decade.”

Over the longer term, the World Economic Forum believes India is a growing consumer market that few multinationals will be able to resist. And its massive growth in online services, coupled with a strong, tech-savvy workforce also bodes well for future growth. ADB, indeed, predicts a 8% growth in 2021 – despite the 9% estitmated contraction this year.

And there are already some positive signs. The Purchasing Managers’ Index (PMI) for manufacturing of 52 in August is indicating expanding economic activity for the first time since April. And India’s largest car maker saw rising car sale numbers in the same month.

Read the full insight at Eastspring.com/lu.