Forecasting Market Trends 2024- Key Sectors To Watch Out For

The global economy has faced its fair share of challenges in 2023. Despite global economic hurdles, India stood firm and demonstrated resilience. Let us dive into what market trends to expect in 2024. Also, read about the key sectors on your growth watchlist in India.

Key Global Market Trends In 2024 

1. The Year Of Elections: One of the significant events in 2024 will be the elections. 2024 will be a historic year, with around 50 countries having national elections. The US, India, Mexico, and South Africa are the larger countries heading to the polls in 2024.
2. Geopolitical Volatility: There is uncertainty in this aspect. Investors and policymakers might face ups and downs with two major ongoing conflicts - the Israel-Hamas and the Russia-Ukraine war. 
3. Decline In Global Inflation: According to the International Monetary Fund (IMF), the global inflation rate is estimated to decline from 6.9% in 2023 to 5.8% in 2024¹. Advanced economies are expected to see an inflation of less than 3%. Meanwhile, emerging markets and developing countries may face a stricter situation with 7.8% inflation.
4. Marginally Slower Global Growth: Global growth is expected to decline again this year by 2.9% in 2024, in sharp contrast to the historical average growth of 3.8% per cent (2000-2019). 

Although there is some uncertainty in the global economy as we enter 2024, India’s economy is up for robust growth as one of the fastest-growing economies. India is also one of the most attractive places for foreign direct investment (FDIs), garnering $33 billion during FY 2023-24 (up to Sep 2023)². 

A Glance At India’s Prowess 

Sectors To Watch Out For Growth In 2024 - India Market Trends

1. Fintech Sector 

India has one of the fastest-growing fintech markets in the world. It is expected to reach $1.3 trillion by 2025, growing at a CAGR of 31% from 2021 to 2025³. 

Growth Drivers Of Fintech Industry 

• Technological Advancements: Companies leverage digital technologies like machine learning, Artificial Intelligence (AI), and indigenous UPI. This adoption helps to improve operational efficiency. 
• Digital Adoption: India is home to the world’s second-largest internet market. The country also witnessed a 71% penetration of smartphone users in 2023⁴ .This rise in digitisation has made financial services more convenient.
• Startup Funding: India ranks third in the total number of fintech companies, with over 9000 registered firms. This sector is projected to grow 4x and generate $400 billion in value creation by 2030⁵. 

2. EV Sector 

EVs are emerging as the driving force behind India's commitment to sustainability. India’s EV market is expected to grow at a CAGR of 49% from 2022-2030⁶. In FY 2022-2023, EV sales marked an impressive year-on-year (y-o-y) growth of 154% compared to FY 2021-2022⁷.

Growth Drivers Of The EV Industry

• Policy Support: The Indian government has announced several regulations that have pushed the faster adoption of EVs. Some of them are the FAME India Programme, the PLI Scheme for ACC Battery Storage Manufacturing and the PLI Scheme for the Auto Sector. 
• Focus On Sustainability: Amidst growing concerns about climate change, there has been a global shift towards sustainability and environment-friendly alternatives. 
• Rising Consumer Awareness: With benefits like lower running costs (despite higher initial costs) and reduced carbon emissions, consumer interest is gradually moving towards EVs.

3. Real Estate Sector 

Real estate is one of the most watched industries in the world. It includes four segments- retail, housing, commercial, and hospitality. According to projections by NAREDCO and EY, India’s real estate market is expected to reach over $1 trillion by 2030⁸.

Growth Drivers Of Real Estate Sector

• Urbanisation: Rapid urbanisation and growing middle-class income led to a surge in demand for real estate. There is also a high demand for commercial areas such as office spaces, retail stores, industrial parks, etc. 
• Rising Investments: FDI in this industry reached $56 billion (Apr 2000- Mar 2023).   Moreover, the Indian real estate sector saw impressive private equity investments worth $1.92 billion in Q2 of 2023⁹.
• Infrastructure Push: The Indian government is taking steps to strengthen the nation’s infrastructure by proposing an INR 10 trillion capital spending in the 2023-24 budget¹⁰. Infrastructure development will also impact the growth of the real estate sector. 

4. Artificial Intelligence (AI)

AI is expected to add up to $15.7 trillion to the global economy by 2030, according to The Comptroller and Auditor General of India (CAG), Girish Chandra Murmu¹¹. Also, there has been a significant jump in the number of startups in India over the last few years, from 8,635 in 2018 to 26,542 in 2022¹².

Growth Drivers Of The Artificial Intelligence Industry

• Skilled Talent Pool: India is witnessing an AI revolution and has the world’s 3rd largest talent pool for AI. This pool is rising phenomenally with increasing awareness and government support. 
• Government Efforts: The Indian government is working towards building a growing ecosystem of AI in India. They have incorporated several AI-based initiatives in sectors such as railways, road safety, IT, etc. 
• Rise Of Startups: Startups continuously bring innovation to the AI space. As of May 2023, there are around 60 startups in the generative AI industry. Additionally, as of May 2023, more than $590 million have been funded by this industry. As per NASSCOM, 2022 saw the heaviest funding flow in this area, with 70% of all private investments flowing towards Gen AI. 

Conclusion

The year 2024 might bring a few ups and downs for the global economy, but India’s outlook remains positive. The narrative of “invest in India” and market trends will remain strong in 2024 as well. Investors might benefit by parking their money in growing sectors. However, investors need to diversify their portfolios to mitigate risk. 

Explore Gripinvest to stay abreast of the latest investment trends to make informed financial decisions.

Frequently Asked Questions 

1. How can I capitalise on the EV industry while earning fixed returns? 

You can invest in options like LeaseX on Grip Invest to capitalise on the industry's growth story. Investors have had opportunities to partner with EV market leaders like BluSmart, Zypp, BatterySmart, and ChargeZone.

2. What are some innovations in the fintech industry for investors? 

SEBI-regulated online bond-providing platforms like Grip Invest make investing in high-yielding, fixed-income opportunities like securitised debt instruments, corporate bonds, etc., accessible to every investor. They offer transparency, stability, and ease of investment through innovation and regulation.

1. International Monetary Fund <https://www.imf.org/en/Publications/WEO/Issues/2023/10/10/world-economic-outlook-october-2023#:~:text=Global%20inflation%20is%20forecast%20to,by%20lower%20international%20commodity%20prices.>
2. Press Information Bureau <https://pib.gov.in/PressReleasePage.aspx?PRID=1990377#:~:text=During%20FY%202022%2D23%2C%20FDI,33%20billion%20has%20been%20reported.>
3. Inc42 <https://inc42.com/features/decoding-1-3-tn-fintech-market-opportunity-for-indian-startups/>
4. Statista <https://www.statista.com/statistics/1229799/india-smartphone-penetration-rate/#:~:text=In%202023%2C%20the%20penetration%20rate,end%20of%202020%20was%20Xiaomi.>
5. Elevation <https://bottomline.elevationcapital.com/part-two-mapping-a-billion>
6. Invest India <https://www.investindia.gov.in/team-india-blogs/indias-ev-economy-future-automotive-transportation>
7. EVreporter <https://evreporter.com/india-ev-sales-for-fy-2022-23-april-2022-march-2023/#:~:text=In%20FY%202022%2D23%2C%20India,units%20across%20all%20vehicle%20segments.>
8. Business Standard <https://www.business-standard.com/article/economy-policy/size-of-india-s-real-estate-industry-to-touch-1-trillion-by-2030-report-123030301303_1.html>
9. Indian Brand Equity Foundation <https://www.ibef.org/industry/real-estate-india> 
10. Reuters <https://www.reuters.com/world/india/india-202324-budget-raises-capex-spend-10-trillion-rupees-2023-02-01/#:~:text=MUMBAI%2C%20Feb%201%20(Reuters),aftermath%20of%20the%20COVID%20crisis.> 
11. INDIAai <https://indiaai.gov.in/news/ai-has-the-potential-to-contribute-15-7-trillion-to-the-global-economy-by-2030-cag-girish-chandra-murmu>
12. Press Information Bureau <https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1913977>

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