It would not be an exaggeration to say that the world has been through a lot lately.

The start of 2020 bought the COVID-19 pandemic, a medical and humanitarian crisis which crippled the world, especially in terms of economic growth. In between variants of the virus, a geopolitical crisis reared its head in the form of a war between Ukraine and Russia.

The war, consequent disruptions in the supply chain and a spike in inflation across the world have hit the economic growth of most economies. Amidst this backdrop, India’s GDP growth has stood out.

At 8.7% in 2021-22 (Apr-Mar), India’s GDP growth was the highest in 22 years^.

While the growth has definitely come off a low base of 2020-22 (Apr-Mar) where India’s GDP growth had contracted by 6.6%^^, India was, nevertheless, one of the fastest growing major economies in the world in FY22.

Furthermore, India is also expected to remain the fastest-growing major economy in the world in 2022, projected to grow at a rate of around 6.4%, according to a report by the UN^^.

Even though GST collections fell in May 2022 from a record high in April 2022, they remained above the ₹140,000-crore mark in May 2022***.

The Nomura India Business Resumption Index shows that economic activity in India is at an all-time high even after the recent rise in the number of cases of COVID-19. The index is in fact, 25.4 percentage points above its pre-pandemic level*.

Another positive is that credit growth has gone back to double-digit levels**; while this is partly on account of inflation as working capital has risen, it is also on account of demand from corporates as they look to invest in their businesses.

The near-term perspective for India may not be the rosiest, but looking at it from a long-term perspective shows things in a different light.

As investors, remaining disciplined and focused could help in being a part of this long-term growth story. Explore our funds!

 

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This article is for information purposes only. The information provided herein is derived from public sources, believed to be from reliable sources. However, no representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. Views expressed herein involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein. Kotak Mahindra Mutual Fund/ Kotak AMC is not indicating or guaranteeing returns on any investments. Past performance may or may not be sustained in future. Readers should seek professional advice before taking any investment-related decisions and alone shall be responsible for any decision taken.

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

Data as of 31st May 2022

^Source: Times of India, Business Standard, Economic Times

^^Source: Business Standard

*Source: Nomura

**Source: RBI, Spark Capital Research

***Source: Motilal Oswal Research