Morgan Stanley revises India's GDP growth forecast to 6.8% for FY25

The revisions reflect an optimistic outlook on India's economic trajectory and Morgan Stanley has highlighted India’s strength and stability as defining features of the current cycle.

Expecting robust growth, with an anticipated growth rate of around 7 per cent in the fourth quarter of FY24, the global brokerage firm said this growth momentum is expected to be widespread, with converging gaps between rural-urban consumption and private-public capital expenditure in FY25.

Foreseeing a favourable inflation trajectory, with recent trends indicating a moderation in headline inflation, the company expects a moderation in core inflation due to supply chain easing and subdued price pressures.

It also projects a shallow easing cycle in monetary policy, driven by sustained traction in industrial and capital expenditure activities, a domestic news agency reported.

Morgan Stanley projects headline inflation to average 4.5 per cent in FY25, down from 5.4 per cent in FY24, while core inflation is expected to remain subdued at 4.1 per cent.

Slower-than-expected global growth, tighter global financial conditions and elevated commodity prices are risks to the country’s growth and macroeconomic stability, the company added.

ALCHEMPro News Desk (DS)