United
States
China Japan Germany United
Kingdom
India
2014 2.4% 7.3% –0.1% 1.6% 2.9% 7.3%
2015 2.4% 6.9% 0.5% 1.5% 2.2% 7.3%

India’s economic train doesn’t stop there either. The country’s growth rate is expected to hover near 7.5% in 2016 and again in 2017, before accelerating again in 2018 through 2020.

India currently stands as the world’s 7th largest economy, up from its rank in the low teens for much of the 1980s to the 2000s. In terms of purchasing power – assuming currencies were priced the same – India is the world’s 3rd largest economy, behind only China and the United States.

Economic reforms that have eased rules for foreign investments, increased infrastructure spending, and demand growth have been key in India’s leap to prominence. The financial, real estate, manufacturing, transport, communication, tourism, and mining sectors each logged 2015 growth of at least 7% and as much as 10%.

The question as we move further into 2016 and beyond is, “Can India sustain this momentum over the next decade?” Corporate debt, inflation concerns, and low job creation are a few of the hurdles the country will face in the coming years. India needs to create 10 million jobs every year to support its substantial population of young people entering the workforce. With an expected total population of 1.6 billion by 2050, that is a problem that probably will not go away in the near future.

These are factors to be considered when searching for new potential investments. However, expectations for India’s long–term growth remain higher than most of the world’s superpowers. The U.S. is projected to grow by about 2.5% on average in 2016 and 2017, the Eurozone should improve slowly, and China’s growth is forecast to drift lower. If India is able to maneuver around the obstacles standing in its path, it has a chance to be a continued bright point in a global economy that is otherwise stuck in neutral.

In many of our Atlas models, we have created an “overweight” to India, and emerging Asia in general. We are expectant that a well–diversified allocation to these areas will result in relatively attractive profit opportunities in the coming years.

As always, we monitor market and economic events continually to determine the best course of actions for our client portfolios based on their respective risk levels. From time to time, we will reach out to you to reaffirm your goals, objectives, and risk tolerance. Please reach out to your Atlas Wealth Advisor if for any reason you have changes that may be pertinent to our management of your portfolio.

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