US economy forecasted for mild slowdown, no deep recession

Nikhil Rungta, an investment expert at LIC Mutual Fund, believes the US economy may face a mild slowdown but a deep recession is unlikely. He noted that factors such as new tariffs and a possible decline in consumer spending could affect the economy's risk level in the upcoming months. In India, Rungta sees potential for the GDP growth to reach 6.5-7% in FY26. This forecast relies on several conditions, including recent inflation dropping to 3.61% and the Reserve Bank of India's decision to cut rates. However, challenges like global trade uncertainties and weak exports might pose risks to achieving this goal. Rungta also mentioned that the RBI has room to cut rates again, regardless of what happens with the Federal Reserve. Continuing to focus on domestic inflation and growth, the RBI may lower rates by another 25 basis points in April. Regarding the US economy, recent inflation data indicates cooling prices, lowering the immediate threat of aggressive Federal action. Despite this, concerns remain about slowing industrial activity and weaker corporate earnings. Equity markets are facing challenges, including valuation issues and weak earnings. Investors are cautious and await clearer signs of recovery before increasing investments. Rungta identified banking, infrastructure, consumption, and IT sectors as potential drivers for long-term growth. In the IT sector, after recent corrections, Rungta believes a deeper decline seems unlikely unless global conditions worsen. Any further weakness may actually present buying opportunities for long-term investors.