Morgan Stanley revises India's FY25 GDP growth to 6.3% from 6.7%

This comes after economic growth fell to 5.4 per cent year on year (YoY) in the second quarter (Q2) of the fiscal.

The slowdown, the steepest since March 2023, was attributed to underwhelming performances in both private consumption and capital expenditure.

Despite private consumption growing by 6 per cent, it outpaced capital expenditure, which increased by only 5.4 per cent.

The industrial sector lagged behind at 3.9 per cent, affected by manufacturing downturns.

But Morgan Stanley remains optimistic about a rebound in the latter half of FY25, with projections of GDP growth reaching 6.6 per cent. Factors such as a strong festive season, government spending, improved rural demand and easing financial conditions are expected to drive this recovery.

Liquidity conditions and inflation rates will be crucial considerations as the central bank reviews its monetary policy, it added.

ALCHEMPro News Desk (DS)