On Wednesday, global brokerage firm Morgan Stanley revised its GDP growth estimates for India upwards for FY25 to 6.8 percent from the earlier projection of 6.5 percent, citing continued traction in industrial and capital expenditure activity. The forecast for FY24 GDP growth remained at 7.9 percent.
According to the company's report, GDP growth is expected to hover around 7 percent in the March 2024 quarter, with Gross Value Added (GVA) growth at 6.3 percent, leading to an estimated GDP growth of 7.9 percent for FY24.
Morgan Stanley anticipates that the growth in FY25 will be broad-based, with narrower gaps between rural-urban consumption and private-public capital expenditure. The report suggests that the economic cycle will see more years of steady expansion driven by improvements in productivity growth, ensuring benign macroeconomic stability. It further forecasts Consumer Price Index (CPI) inflation to remain at 4.5% in both FY25 and FY26, indicating stability in price levels. Additionally, the current account deficit is expected to be at 1% of GDP in both FY25 and FY26.
The upward revision of India's GDP growth forecasts by Morgan Stanley reflects confidence in the country's economic resilience and sustained growth momentum. The positive outlook is supported by ongoing industrial and capital expenditure traction, signaling favorable conditions for economic expansion in the coming years.
