India to become world's third largest economy by 2027, says JP Morgan MD

JPMorgan's managing director of Asia Pacific equity research, James Sullivan, said that India will become the world's third-largest economy by 2027, with its gross domestic product (GDP) more than doubling to $7 trillion by 2030.

In an interview with CNBC-TV18, Sullivan said, "I would argue very strong long-term tactical drivers that make India a key overweight from a structural perspective from JPMorgan."

Sullivan said that the manufacturing contribution to India's GDP may rise to nearly 25 per cent from 17 per cent, and exports to more than double, to over a trillion dollars.

He added, "From a longer-term perspective, we see massive changes in the overall structure of the Indian economy, which present clear opportunities for sector selection within what we think will be a strong overall market."

Sullivan said the below-average earnings revision in China, a trend not seen since 2005, suggests that China may be at an inflexion point in its economic trajectory.

"Such an inflexion point can often lead to new opportunities and challenges, making it a topic of keen interest for investors," he said.

Sullivan added, "In China, we are very focused on specific sectors, if we can focus in line with government policy, if we can focus on deeply beaten down sectors that offer significant valuation support, then we see opportunity. So, it's a slightly different portfolio allocation strategy in each market."

According to reports, China is contemplating a boost in its 2023 budget deficit through a new stimulus initiative. The nation is planning on setting up a stock stabilisation fund to bolster investor confidence within the stock market.