Jefferies Forecasts India's Emergence as the World's Third-Largest Economy by 2027

Jefferies, a prominent global brokerage firm, has forecasted that India will rise to become the world's third-largest economy by 2027, driven by a pattern of steady GDP expansion.

This prediction is supported by favorable geopolitical conditions and an increase in market capitalization, indicating that India's economic growth will be sustained by ongoing reforms and the development of its corporate culture

Growth Trajectory:

India's robust economic performance over the past decade, averaging between 10-12% in USD terms, underscores its resilience and potential for sustained growth. Mahesh Nandurkar, India Equity analyst at Jefferies, emphasizes India's remarkable GDP growth, projecting it to reach $5 trillion by 2027, propelling the nation ahead of stalwarts like Japan and Germany.

Factors Driving Growth

Jefferies identifies several factors propelling India's economic surge, including demographic dividends, institutional strengthening, and governance improvements. Continued reforms are expected to uphold India's status as the fastest-growing large economy, supported by a conducive investment environment and a burgeoning corporate sector.

Reforms and Governance:

Significant reforms such as the implementation of GST, streamlined taxation, and enhanced trade efficiencies are slated to revamp corporate and banking sector balance sheets, fostering improved governance. These measures are pivotal in attracting investments and fortifying India's economic fundamentals.

Market Capitalization Surge:

India's burgeoning market capitalization, currently ranked fifth globally at $4.5 trillion, is poised for further escalation. As market free float expands, India's weight in global indices is expected to rise, reflecting its growing prominence in the global economic landscape.

Geopolitical Dynamics:

Jefferies highlights India's improving relations with other nations as a catalyst for economic growth. Strengthened diplomatic ties and strategic partnerships are anticipated to unlock new avenues for trade and investment, bolstering India's economic resilience.

Corporate Culture and Investor Confidence:

India's robust institutional framework, complemented by vigilant regulators and intermediaries, has fostered the development of a robust domestic investor base. With a plethora of RoE-focused companies and attractive investment opportunities, India's corporate sector continues to inspire confidence among investors.

In conclusion, Jefferies' bullish outlook on India's economy underscores the nation's transformative potential and resilience in the face of global uncertainties.

Also read: RBI Monthly Bulletin Forecasts Continued Growth Trajectory for Indian Economy

As India embarks on a trajectory of sustainable growth, fueled by reforms, demographic dividends, and enhanced governance, the stage is set for India to emerge as a global economic powerhouse in the coming years.