Indian Economy and falling oil prices..............

INDIAN growth at 7% and China slowdowns as per PWC.

As per new study we are expected to grow at 7% whereas China’s economy to slows down.

In short term view…….

As per PWC report India is expected to grow around 6% to 7% in 2015 despite of global problem. There is good news that Oil prices are coming down and helping us to bring down our rising current account deficit, resulting in lowering inflation.

In mid-term view…..

Expectation are there in Feb, 2015 budget, there are high chances of implementation of new economic reform’s resulting in boosting our economic.

In long term view…

Indian economy was expected to grow between 5.5% in 2014-15 and 6.3% in 2015-16. In global economy like china which is expected to post growth around 7.2% which is lowest since 1990 and its high level debt pose high slow down risk. On the other side USA may see fastest growth in decade, most of euro zone will see quantitative easing program ie: more of govt. bond purchasing.

Oil prices will be around $60-$70 over the course of 2015 and may end up at $80 however oil prices are expected to remain unpredictable

India has ability to become $5 trillion economy by 2025 becoming the third largest economy after USA and China. We has capacity to take over Britain by 2018 and becoming largest economy in Common Wealth.

It took India 60 year to to a $1 trilion economy however it will take only 10yr to reach another trillion and another 10yr to reach at another trillion. India will reach at 6% per annum and reaching to 10%  or could more in coming 10 to 12 year

In India we have many reforms starting from Infrastructure investment. We need investment in this sector, 6% of investment of our GDP and with broker PPP model could not take our economy much farther. In spite of crores of projects being cleared the order book size for capital good or construction is not increasing.  

High bidding, race to bottom pricing, coupled with huge land acquisition issues and non-existent cash flows led to all project economics being turned on its head and sector is going in deep red. Our corporate debt ration are highest in world in which infra sector has fair share to that.

New government’s reform’s steps will definitely contribute in our growth prospect, reducing subsidies which is unproductive and unwanted expenditure could be stopped which will free up cash flows for investment,.

Best thing for our country is falling oil prices. Since 2008 global recession oil prices has collapsed and led to shifting prower for autocratic petro-states to industrialized consumers making our world safer.  The major talked Shale supply, started weakening Asian and European demand and a stronger dollar is pushing oil past threshold  to 5 yrs low, with fall below $40 a barrel.

 

Biggest news is "Oil prices for 2015," "They are a once-in-a-generation shock.

 

If the price falls past $39 a barrel, we could see it go as low as $30 a barrel, said Walter Zimmerman, chief technical strategist for UnitedI CAP in Jersey City, New Jersey, who projected the 2014 drop. 

"Where prices bottom will be based on an emotional decision," Zimmerman said. "It won't be based on the supply-demand fun damentals, so it's guaranteed to be overdone to the downside." 

 

 Refrnce: Economic times articles........