The US credit rating cut and uncertainties about Europe’s debt situation is a cause concern. Potential negatives would be:
- A reduction in foreign institutional investment monies, including those targeted at real estate
- A reduced spend on IT by the US, given the slackness of the US economy, may have an impact on the IT outsourcing business and affect Indian real estate at various levels
- Overall market sentiments are likely to decline
However, there are possible upsides to the situation:
- Commodity prices – especially in terms of crude oil – are likely to come down, and this will help curb inflation
- Under the circumstances, the Indian business lobby may now be able to make a stronger and potentially successful case against further interest rate hikes with the RBI
- We can reasonably expect a reverse exodus of funds from the US into India and boosting the country’s potential to effectively capitalize on the inevitable rebound
The author, Anuj Puri is Chairman & Country Head, Jones Lang LaSalle India
1 Comment
According to me the Corporate Leasing rates would be affected with a loss of slowdown in the IT/ITES space per se.The stock markets have plumetted for straight 6 trading sessions in India and more or less acrossthe globe. The Retail NRI and indian investor would park funds in Realty,Gold or more in Debt instruments.
As there has been a trend of an inverse ratio between gold/crude oil coupled with a lot many other factors pertaining to Demand and Supply,both gold prices will come down post festive season and so will crude increase.Curbing inflation will be a tempreory phenomenon untill we meet the supply of differnt commodities.
Also there could be a possibility for the indian/world investor to buy properties in U.S.A and Europe at cheaper valuations