Morgan Stanley expects India’s GDP growth to remain robust, with an anticipated growth rate of around seven per cent in the fourth quarter of FY24 (quarter ending in March 2024).
Global brokerage firm Morgan Stanley increases its gross domestic product (GDP) growth forecast for the financial year 2024-25 (FY25) to 6.8 per cent, up from its earlier estimate of 6.5 per cent. The firm also revised its growth forecast for the ongoing financial year (FY24) to 7.9 per cent.
Morgan Stanley expects India’s GDP growth to remain robust, with an anticipated growth rate of around seven per cent in the fourth quarter of FY24 (quarter ending in March 2024). This growth momentum is expected to be widespread, with converging gaps between rural-urban consumption and private-public capital expenditure in FY25.
Why Morgan Stanley Revised India’s GDP Growth Estimate?
Morgan Stanley has revised the GDP growth estimate after an optimistic outlook on India’s economic trajectory, it highlighted the country’s strength and stability as hallmarks of the current cycle.
Another reason for the high estimate was that the firm expects RBI easing cycle in monetary policy, driven by continued traction in industrial and capital expenditure activities.
Morgan Stanley On March Quarter
According to Morgan Stanley, the outlook for India’s GDP growth remains robust, with the expectation that growth will track around 7 per cent in the fourth quarter of the financial year 2023-24 (QE Mar-24).
The report says, though the growth momentum is expected to be broad-based, there will be the gaps between rural-urban consumption and private-public capital expenditure narrowing in FY25.
Morgan Stanley On Inflation
Looking at the current numbers on inflation,the firm expects a favorable inflation trajectory in various baskets. As the recent trends indicate a softening in headline inflation. Food inflation, which carries higher weight in the CPI basket, has moderated, providing relief from supply-side shocks.
Furthermore, core inflation has seen meaningful moderation, driven by easing in supply chains and subdued price pressures.
The firm expects headline inflation to average 4.5 per cent in FY25, down from 5.4 per cent in FY24, while core inflation is projected to remain muted at 4.1 per cent.
The firm anticipates a continuation of supply-chain normalisation along with easing commodity price pressures, contributing to the disinflation trend.
Despite the positive economic outlook, Morgan Stanley highlights potential risks stemming from global factors and domestic uncertainties.
(With Inputs From ANI)