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Record Indian stock rally must price risk from robots, says UBS Group

A global shift toward automation could be a significant negative, leaving many underemployed or without a job

Bloomberg  |  Mumbai 

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will eat into any economic boost India receives from its young population and aren’t pricing in these risks, says AG. have been hitting fresh highs and while UBS predicts growth and will increase over the next five years, it cautions that immediate risks are to the downside. A global shift toward could be a significant negative, leaving many underemployed or without a job.

“This could be a grey-sky scenario for India in terms of gross domestic product and earnings growth, and could also lead to major social issues,” analysts including Gautam Chhaochharia wrote in a note. “This impact is likely to be beyond the next five years and government policy response — like more protectionism and a ‘Universal Basic Income’— will matter.”

India’s millennial generation is bigger than China's or the US, which is estimated to boost its labor force to the world's largest by 2027. At best, UBS estimates India will create 6 million each year for 7 million job seekers, while the bleakest outlook is 1 million. UBS says India doesn’t seem to be well positioned to leverage from the shift toward

First Published: Tue, January 16 2018. 01:15 IST
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