JPMorgan raises 2024 economic outlook for India, but remains cautious of global headwinds

JPMorgan accrued its 2024 economical forecast for India — but lone marginally — saying the country's maturation volition beryllium affected by a slowdown successful planetary maturation momentum. 

The concern slope raised its 2024 maturation forecast from 5% to 5.5%. The revision follows the latest gross home merchandise information this week which showed the Indian system accelerated 6.1% successful the January to March quarter, an summation from 4.5% the erstwhile quarter. 

The system started the twelvemonth connected a "very beardown enactment arsenic maturation came successful overmuch faster, oregon overmuch higher, than what marketplace statement were," DBS Bank elder economist Radhika Rao said. 

The South Asian nation's beardown maturation was driven by a prime up successful home request for goods and services arsenic good arsenic beardown exports. 

"We person been flagging the continued spot of India's work exports and however goods exports were besides doing cyclically amended than had been expected," JPMorgan said successful a note. 

There were besides "several pockets of upside surprises, including manufacturing, construction, and workplace output … fixed superior concern maturation has besides fared better," Rao told CNBC's "Street Signs Asia" connected Thursday. 

Economies that are heavy babelike connected commercialized are losing momentum, she said, but those similar India that person been focused connected "organic drivers" of maturation are faring better. 

However, JPMorgan inactive remains cautious connected the country's maturation prospects adjacent year. 

Although the authorities has announced a boost successful capex spending, it volition instrumentality clip for that to construe into a broader backstage concern cycle. 

Investments from India person not "moved precise much" successful the past fewer years, said Jahangir Aziz, main of emerging marketplace economics astatine JPMorgan. 

"In the past six months, we've seen a perceptible driblet of overseas nonstop investments crossed the world," Aziz said, adding that FDI in both China and India person dipped. 

"Private investments successful India person fundamentally flatlined … And nationalist spending from the government's investments person flatlined astatine 7% for the past 10 years," helium highlighted.  

The concern slope besides expects exports from India to alteration arsenic planetary maturation slows with much precocious economies heading toward a recession.

"Global maturation momentum is inactive expected to dilatory successful the coming quarters and, domestically, the interaction of monetary argumentation normalization volition beryllium felt with a lag," JPMorgan said.