14 May 2022

Financial markets have not been a comforting picture to look at lately. A steep rise in inflation in the aftermath of the COVID-19 pandemic has impacted the growth outlook at a global level.

A Global Fund Manager Survey by Bank of America shows that growth optimism is at its lowest level in a decade.

The real GDP in the world’s largest nation, the US, fell by 1.4% in Jan-Mar 2022*, and all this, while central banks worldwide are hiking interest rates to tame inflation.

The global economy is clearly at a cross-road.

And valuations across asset classes seem to be bearing the brunt as this era of ample liquidity is coming to an end.

Let’s see what the current scenario looks like –

The global financial picture does appear bleak, but here are a few bright spots in the Indian economy you can look at, which may augur well over the longer run.

  • Tax Revenue: The tax revenue for 2021-22 (Apr-Mar) has risen to a record high of ₹27.07 tn^. This gives the government the scope to spend more on its priority areas of infrastructure, defence, education etc.

  • Services Exports: The value of exports for the year gone by has also risen to an all-time high of $670 bn^, which could ultimately be beneficial for the economic growth of the country.

  • GST Collections: Since its inception nearly five years back, the GST collection in April 2022 was at an all-time high of ₹1.68 tn^, helped by robust business activity in the country.

  • Unicorns: India now has 100 unicorns or start-ups with a valuation of more than $1 bn^. The country now has the third-highest number of unicorns in the world.

  • Monsoon: The India Meteorological Department has estimated that monsoon rains in 2022 will be 98%^ of the Long Period Average, or ‘normal’. This may bode well for farm incomes.

Times are volatile, but let’s try and remain disciplined with investments, and focus on the long-term. Check our Monthly Outlook Presentation today and Watch Mr. Nilesh Shah share his outlook for the month.

 

 


 

*Source: IMF, World Economic Outlook, April 2022.

^Source: Business Standard, Hindustan Times, Business Insider, Economic Times, Business Today, The Print, Nirmal Bang.

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© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.