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‘Government to continue driving capex cycle’ helobaba.com

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MUMBAI: A large number of Indian fund managers expect govt to continue to lead the capex cycle in the coming few years, but also expect private capex to revive – something that has been absent in the past few years. Along with these two growth drivers for the Indian economy, urban and rural consumption would also chip in, while services exports are expected to be muted, a survey conducted by Centrum Wealth showed.
The survey was conducted among fund managers from 22 domestic fund houses who together oversee nearly 85% of the combined assets worth about Rs 50 lakh crore, across equity and debt. The survey was conducted in Dec 2023-Jan 2024 and the results were shared exclusively with TOI.
All fund managers also believe that the ruling BJP-led coalition will come back to power at the centre after the Lok Sabha elections in mid-2024. These fund managers are equally split on whether the alliance will get more or less seats in the lower house in 2024 than what they got in 2019. While nearly 80% of the fund managers surveyed expect the Indian economy to clock a growth rate between 6-7% in FY25, about 11% feel it could be more than 7% – which is also RBI’s estimated growth rate.
Domestic money managers also feel that slowdown of the global economy and geopolitical factors are the biggest risks to India’s growth outlook. However, half of those surveyed feel that global factors would not have much impact on India’s growth prospects.
Other factors that could slow down the domestic economy are slower growth of income & consumption, high inflation and high interest rate.
Fund managers across the spectrum expect retail inflation rate in India to hover between 4-6% in FY25, with 71% betting on it to remain between 4-5%. On the global front, 59% of the managers feel that the US Fed will cut interest rate by up to 1 percentage point this year while only 24% are betting on a rate cut by not more than 50 bps.

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