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BANQUE RICHELIEU: AI AND INDIA,

GROWTH DRIVERS FOR 2024 AND BEYOND

by Alexandre Hezez
In 2023, GDP growth outperformed expectations, while core inflation fell from 6% in 2022 to 3%
in the US, reflecting the effects of aggressive monetary policies and post-COVID normalization.
Curiously, the year saw no major shocks affecting supply, demand or global trade, with inflation on
the decline thanks to a combination of monetary policies and adjusted economic behavior.

Consumers moderated their purchases, improve efficiency, reduce costs and develop could boost the country’s structural growth
companies adjusted their inventories, and new products and services. rate to 8-10%.
governments reduced excessive spending. The AI revolution, while opening up horizons This growth, which is less resource-intensive
2024 promises to be a year of challenges of opportunity, also creates a distinct dynamic than China’s, is based more on the service
and opportunities. Three macro-economic of winners and losers. On the one hand, sector. The Indian government is also
“engines” should gradually come into play the winners of this revolution will be those committed to developing the manufacturing
in the first half of 2024: rising real wages, who actively embrace AI across the various sector and attracting foreign investment. India
the gradual improvement in financial and links in the value chain. On the other hand, faces challenges such as poverty, corruption
banking conditions, and the resumption of the potential losers are those who resist or and inequality. Inflation remains a structural
the industrial cycle due on the one hand to are slow to adapt to these changes. These weakness. However, the country has made
the end of destocking and on the other to the groups risk being left behind in an economy significant progress in recent years and its
spread of stimulus plans. increasingly dominated by AI, with potential growth trajectory is positive. Almost half of
As the global economy stabilizes after the consequences for employment, market share this year’s infrastructure spending budget
pandemic, two driving forces are emerging: and overall relevance in their field. of $120 billion, or 3.3% of GDP, is devoted to
artificial intelligence (AI) and India. roads and railroads.
India is one of the world’s most dynamic
AI is revolutionizing every aspect of human emerging markets. India’s prospects largely stand out in the
life. With its young population and sustained growth, emerging zone, despite the volatility associated
From healthcare to finance to retail, AI offers India attracts foreign investors. The country is with any transformation.
unprecedented solutions for optimizing investing massively in its infrastructure and
processes, driving innovation and personalizing developing its manufacturing sector. However,
services. This technological revolution is India still faces challenges such as energy
paving the way for unprecedented economic import dependency and job creation.
growth, but it also raises important ethical and
social questions. It promises to redefine not With a population of over 1.3 billion and a GDP
only our economy, but also the way we live, of almost $4,000 billion, India offers immense
work and interact with each other. AI represents growth potential. The ongoing logistics © Tous droits réservés
the current frontier of human progress, a field revolution, characterized by a significant
where innovation continues to push back the improvement in transport infrastructure, Alexandre Hezez, Strategiste Groupe / Group Strategist
boundaries of what is possible.

It can automate repetitive tasks, analyze
large amounts of data and make smarter
decisions. AI is already used in many sectors,
including healthcare (to diagnose diseases,
develop treatments and personalize patient
care), Finance (to detect fraud, manage
risk and automate transactions) or Retail
(to recommend products, personalize the
customer experience and optimize the supply
chain).

AI offers opportunities for growth and
innovation in all sectors. It can help companies

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