Poor monsoon is a risk, but unlikely to trigger runaway food inflation: Axis AMC’s R. Sivakumar

Axis AMC CIO R. Sivakumar said a slow-growth environment with nominal GDP growth falling to the 8% range — a more than 20-year low outside COVID — is the primary trigger for Indian market underperformance and foreign outflows. He expects policy drag from fiscal deficit contraction (13% to 7.5% of GDP) and aggressive rate hikes to end, with nominal GDP growth accelerating to 11-12% over the next two years and drawing foreign buyers back. On monsoon, he flagged a rainfall deficit as a legitimate risk that could dent rural incomes but said it is unlikely to trigger runaway food inflation.