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| Dharmakirti Joshi, a speaker at the marcus evans APAC Investments Summit 2012, on finding areas of growth during an economic crisis. |
London, Mar 9, 2012 - (ACN Newswire) - Growth in India may currently be slow, but foreign investors can prosper from the healthy medium-term prospects, says Dharmakirti Joshi, Chief Economist, CRISIL Ltd. The economy will soon recover, and those who act now will flourish in the long-term, he adds.
A speaker at the upcoming marcus evans APAC Investments Summit 2012, taking place in Macao, China, 16 - 18 April, Joshi offers his expertise in investing in India's volatile market during times of global downturn.
- How has the eurozone crisis affected India's economy? Has this altered the behaviour of investors in Asia?
Investor behaviour has been volatile. Since August 2011, rising risks in the eurozone have led to weakening of capital inflows into India. The risk aversion of foreign investors started and resulted in a net outflow of USD 2 billion in the four months after August. The situation then reversed in 2012 and capital inflows into India picked up. This led to almost 13-14 per cent returns from equity markets in January itself.
The Indian economy has been vulnerable for a while due to rising current account deficit and external shocks of slowing exports, weakening the Rupee. The rising burden of servicing foreign debt of private corporate increased the demand for US Dollars, adding to the weakening of our currency. With the revival of foreign capital flows, the Rupee started strengthening against the US Dollar in 2012.
- Should investors be wary of the inflation rates in India?
The economy is slowing down due to stubborn inflation and consequent increase in interest rates. In the current year, inflation and interest rates should moderate and those who invest now can prosper.
Interest rates have increased over the past year and are now beginning to bite into the economy. Private consumption growth is holding up but investment demand has suffered. On top of that, there is a lack of progress on the domestic policy reform front. The slowing growth and lack of policy reforms are harming India from a domestic point of view.
- What is your outlook for the future of the Asian market?
It all depends on what happens in the eurozone, but growth will be sluggish throughout 2012. India is a domestic demand led economy, but its linkages to the rest of the world have strengthened over the last few years.
There will be challenges in the corporate world. Raising money and rolling over foreign debt will become extremely difficult if the eurozone crisis worsens.
- Should investors in Asia make use of sustainable and responsible investing?
Sustainable investing is crucial if investors wish to prosper in the long-term. Looking at Indian growth prospects going ahead, India's seven per cent growth is tremendous compared to the rest of the world. In 2011, the Rupee depreciated and the stock markets were doing poorly, but markets have picked up since January this year and the Rupee too has strengthened, yielding good returns to foreign investors.
- Any final comments?
Investors should look into medium- and long- term prospects in India. Now is the time to invest as growth will soon pick up again. A young population, a fast rising middle class and high savings and investment rates create potential for India to sustain high growth rates over the medium run.
About the APAC Investments Summit 2012
This unique forum will take place at The Venetian Macao, Macao, China, 16 - 18 April 2012. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes presentations on growth despite the global downturn, fuelling investments across the region and increased urbanisation and its corresponding needs.
For more information please send an email to info@marcusevanscy.com or visit the event website at www.apacinvestmentssummit.com/DharmakirtiJoshiInterview
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Source: marcus evans Summits
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