India will be a $2-trillion economy in the next five years
Mumbai: India will be a $2-trillion economy in the next five years as its GDP growth is likely to average at 12 percent in nominal terms powered by a huge consumption demand, Enam Securities has said.
"India's GDP is likely to grow at (an) average 12 percent in nominal terms. Hence, India will be a $2 trillion economy by 2014-15," said Enam Securities Head-Research, Nandan Chakraborty, and Economist Sachchidanand Shukla in a report titled India Strategy.
This growth will be led by the huge consumption demand in sectors like FMCG, power, auto (small car hub), IT and pharma. The brokerage firm said that insurance companies, financial services and equity markets will flourish as the country's annual savings pool grows to $700 billion from $400 billion at present.
"More than half of this ($700 billion) could flow into financial savings. With favourable demographics and average seven percent real growth, India can sustain more than 30 percent savings rate akin to the Asian tigers, or China and Japan. This will transform the domestic financial services space," said Enam.
Life insurance penetration in India, which is already a USD one-trillion economy, is estimated to reach a level of 4.4 percent over the next two years as insurance companies focus on expanding into rural India, the report said.
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