In India, growth in the fourth quarter of 2024 was 6.2%. This figure marks a rebound from the 5.4% of the previous quarter, which was marked by a dry spell for household consumption spending.
Since then, the authorities in Delhi have been trying to do everything possible to boost domestic demand, with limited impact. Indeed, it was not the recovery of consumption but rather the substantial increase in public spending that allowed the Indian economy to accelerate again at the end of the year.
The fiscal and budgetary measures announced in recent weeks are part of this desire to do better, as is the fall in Indian rates on February 7, the first since May 2020. Together and supported by continued reform, these measures should help the Indian domestic market regain a different tone.
It must be said that in India, growth is not trivial. While Europe is divided, and some people have the luxury of advocating decline, in India, wealth creation is a key factor for the country to lift millions of its citizens out of poverty. According to the World Bank, the world’s most populous nation will need an average growth of around 7.8% per year to join the club of rich countries.
Faced with such a reality, avoiding empty passages is not a luxury but a necessity. So, there is every reason to believe that Delhi will stay on the reform track and that this vast market will continue to grow quickly.
We therefore encourage you to take advantage of the recent decline in the Indian market and position yourself on the country's assets. Up to 5% of these are present in our neutral and dynamic portfolios.