Irony of Prediction: Black Swan Events. So, largely assuming no surprise of a black swan event, the predictions for next year are as follows.
All most every one is predicting NDA victory and to large extent, there would be no surprise. The question that plays on every ones mind about Modinomics or in more sublime way, whether Stock Market, Real Estate and at macro level would economy rebound. I do not think, modi would shake up things over night, certainly with stable government, unless they are driven by hubris, should do good to India. Only, caveat they should not forget the lessons of UPA-II.
Based on my little understanding of arm chair economics, my prediction for next 1 year are as under.
# After economic slide of last two-three years, macro economic outlook seems positive. Not because of NDA but with every dip in economy / business cycle, there would be corresponding upside, and to me the time for upside is now…that has nothing to do with stable government.
# With met department, not projecting very poor monsoon, whole sale price index and so the inflation should stabilise. All ready steps taken by RBI are showing the result.
# Indian demography now peaking, resulting into need for urban infrastructure. With SC lifting ban on mining, economic wheels that have come to grinding halt must restart.
# Cost of production/construction, would stabilise for at least couple of years.
# Current Account deficit is largely under control, with buoyant confidence of stable government, dollar should stabilise with more foreign inflow, net result, petrol price to remain stable or go down.
# Interest rates to cool off in coming quarter. RBI would largely try and focus on containing inflation at the cost of growth, resulting into stable monetary policy.
# NDA would provide direction to the economy, at least non decisive ministry due to multiple scams would put policy in motion.
# E Commerce will take big way in coming years, resulting into sharp drop in rentals in commercial space.
All these would result into :
# Better outlook for India in near term.
# Markets would go up with constant FII inflow.
# Dollor to stabilise below 60.
# Residential Real Estate would remain stable in next one-two years. Price decline would stop for now however, no sudden jump would be witnessed in coming quarters.
# Commercial Properties would see a decline in price rise.
Certainly at macro economic level, we would see exciting times ahead, and though the days of 7% GDP growth are over, but still economy would be more stable and certainly positive momentum would return.