Investment Expert Vijayakumar Analyses Economic Scenario at KMA Event
Kochi: Kerala Management Association (KMA) organised an evening lecture on the topic ‘Emerging Economic and Stock Market Scenario’ on June 20 at KMA Hall, Panampilly Nagar. The speaker of the session was Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, who is also a leading economist.
Vijayakumar opened his presentation by analysing the global economic scenario. “Global economy has been muted for about eight years after the recession, but in 2017 it rebounded and came around with a growth rate of 3.90 per cent and the trend is expected to continue this year also. It was a synchronised global growth without any major troubles,” he said.
Highlighting the World Bank’s ‘Global Economic Prospects’, he said that India will be the fastest growing economy in 2018 with a growth rate of 7.4 per cent. “It is expected to accelerate further in 2019 with a growth rate of 7.8 per cent.”
Moving to the Indian scenario, Vijayakumar said that the growth rate last year was 6.7 per cent, which is one of the lowest rates in recent times. ”The growth was impacted by demonetisation and GST implementation. In Q1 of the last financial year, GDP growth crashed to 5.7 per cent; from there, we started improving and in the last quarter the GDP growth was 7.7 per cent. The recovery is likely to sustain; index of the industrial production has been good. In spite of the recent hike in the repo rate by RBI, the interest rate is attractive. Inflation is now under control and investment is slowly picking up,” he said.
However, Vijayakumar pointed out that private investment has been laggard. “Private investment is not something which will be influenced beyond a point by the interest rates,” he said.
Vijayakumar explained the situation. “In India, the problem we face is the excess capacity in industry. If you are running a business and it is operating at 65 per cent capacity utilisation, you will not borrow even if money is available at low rates of interest. The investment will happen only when the capacity utilisation reaches at least 80 per cent. But the situation is undergoing a change, though gradually. Now private investment is taking place which is making economists hopeful about a strong rebounding economic growth in the coming year.”
He also pointed out that last year was one of the best periods for stock markets globally and India currently holds the thirteenth position in this regard.
Being a keen observer of the financial markets, Vijayakumar has presented several papers and delivered numerous lecturers on the capital market in national and international seminars. His paper ‘Financial Innovations: Boons and Disasters’ was judged as the best paper in the International Conference held at Loyola College, Chennai in January 2009.
Deepak L Aswani, Programme Chair, introduced the speaker and honorary secretary R Madhav Chandran proposed the vote of thanks. KMA president Vivek Krishna Govind presided over the event.