Ray Dalio sees India's growth rate at 7% over next 10 yrs

Billionaire investor and hedge fund manager Ray Dalio has projected India to score a growth rate of about 7% over the next 10 years. Congratulating India on the successful lunar mission, Dalio says India successfully landing its Chandrayaan-3 spacecraft on the moon is "another one of many straws in the wind showing its ascendence".

"As previously shown in my health index for countries, which is used to derive my projections for countries' next 10-year growth rates, India scores on top with a projected growth rate over the next 10 years of about 7%," says Dalio via a post on microblogging platform X.

The founder of Bridgewater Associates, one of the world's biggest hedge funds, says India has the "right mix of ingredients" that shows it has great potential and the right leadership to catalyse it.

"It reminds me a lot of China in 1984 (when I first went) around the time Deng Xiaoping made his reform and opening up policies that catalyzed China. Congratulations India!" he adds.

Dalio's 'Country Power Index' shows India appears to be a middle-of-the-pack power (#7 among major countries today) in ascent. "The key strengths of India are its strong economic and financial position and its cost-competitive labour (on a quality-adjusted basis)," the index shows.

Notably, India has the cheapest labour among major countries. “Adjusted for worker quality, the country's labour is significantly cheaper than the global average.”

On the downside, the country remains weak in terms of "bad reading on innovation and technology", its "weak relative position" in education, and its "corruption and inconsistent rule of law", shows Dalio’s index, titled the ‘Changing World Order’.

In innovation and technology, too, shows the Dalio index, India has a small share (less than 1%) of global patent applications, a small share (2%) of global R&D spending, and a moderate share (2%) of global researchers. India also scores badly on years of education — students have on average 6.4 years of education vs 11.7 in the average major country.

"India has slightly more foreign debts than foreign assets (net IIP is -12% of GDP). Non-financial debt levels are low (123% of GDP), though government debt levels are typical for major countries today (78% of GDP). The bulk (95%) of these debts are in its own currency, which mitigates its debt risks."

He, however, opines India is in a highly favourable position in its economic and financial cycles, with a low debt burden and high expected real growth over the next 10 years (6.6% per year).

Notably, Moody's Investors Service, in its latest research note, says India's economic growth will outpace all other G20 economies through at least the next two years, driven by domestic demand. "The affirmation and stable outlook are driven by Moody's view that India's economy is likely to continue to grow rapidly by international standards, although potential growth has come down in the past 7-10 years," says Moody's.