According to a research note by DBS Bank, the broader narrative about the pick-up in the investment cycle is that it is mostly driven by the public sector, led by the central government.
According to Radhika Rao, executive director and senior economist, and Daisy Sharma, data analytics at DBS Bank, the private sector has led the surge in capital formation driven by households after the pandemic.
The report noted, "Total gross capital formation (GCF) increased to 33 per cent of nominal GDP in FY2014, which is better than recent years, but still lower than a decade ago. "
Looking deeper, the composition of investments shows that the public sector share in the GCF stood at 22 per cent in FY2013, with the rest being the private sector – corporates and households – making up the bulk of the overall GCF.
In the private sector, households led with 40 per cent share in FY2013, followed by non-financial corporates at 37 per cent.
"Domestic investment is the highest in a decade in FY23 and accounts for 25 per cent of GDP along with corporates," the note said. Public sector financial as well as non-financial institutions and general government investment The remaining 7 percent of domestic product is." ,
According to the note, housing and buildings are at the forefront, which also reflects the high involvement of the public sector.
Rao said, "The upturn in machinery and equipment is a work in progress. We see similar movements in the regional downtrend. Finally, we build a multivariate regression model to measure the drivers and outlook of gross fixed investment. Are."
According to Radhika Rao, executive director and senior economist, and Daisy Sharma, data analytics at DBS Bank, the private sector has led the surge in capital formation driven by households after the pandemic.
The report noted, "Total gross capital formation (GCF) increased to 33 per cent of nominal GDP in FY2014, which is better than recent years, but still lower than a decade ago. "
Looking deeper, the composition of investments shows that the public sector share in the GCF stood at 22 per cent in FY2013, with the rest being the private sector – corporates and households – making up the bulk of the overall GCF.
In the private sector, households led with 40 per cent share in FY2013, followed by non-financial corporates at 37 per cent.
"Domestic investment is the highest in a decade in FY23 and accounts for 25 per cent of GDP along with corporates," the note said. Public sector financial as well as non-financial institutions and general government investment The remaining 7 percent of domestic product is." ,
According to the note, housing and buildings are at the forefront, which also reflects the high involvement of the public sector.
Rao said, "The upturn in machinery and equipment is a work in progress. We see similar movements in the regional downtrend. Finally, we build a multivariate regression model to measure the drivers and outlook of gross fixed investment. Are."
