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The strongest among the largest economies, India’s GDP growth will average 7% throughout this time, according to Morgan Stanley analysts, and India will contribute 28% and 22%, respectively, to both Asian and global growth. India will have the fastest-growing economy in Asia in 2022–2023 as a result. They asserted that the Indian economy is on track to have its best year in more than ten years as a result of the reawakening of latent demand.
KEY TAKEAWAYS
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Certainty of India’s GDP Growth
- The evident shift in policy emphasis in favour of boosting the economy’s productive capacity and India’s GDP growth, according to Chetan Ahya, head economist for Asia at Morgan Stanley, is the most significant change in India’s structural narrative
- The brokerage expects India’s growth to average 7% for 2022-2023 and contribute 28% and 22% to Asian and global growth, respectively
- He asserted that several reforms made by policymakers would accelerate the private CAPEX cycle, help to unleash a potent productivity dynamic and signal the beginning of a positive cycle
- A drop in commodity prices, particularly those of crude oil, has substantially aided this confidence in India’s GDP development.
- Morgan Stanley forecasts that macro stability indicators will recover to a comfortable level and that the Reserve Bank of India (RBI) may not need to hike rates significantly any time soon because oil and commodity prices have fallen between 23 and 37% from their peak in March 2022.
RBI’s initiative in Accelerating India’s GDP Growth
- Since May 2022, the Reserve Bank of India (RBI) has swiftly raised policy rates by a total of 140 basis points (bps), bringing them to 5.4 percent, just slightly higher than levels prior to the pandemic of 5.1 percent.
- The economy’s reopening earlier this year has also helped the recovery of India’s GDP growth, along with the drop in commodity prices. According to Morgan Stanley, demand has recently increased because of increased mobility and sustained levels above pre-Covid levels.
About Morgan Stanley
Henry Sturgis Morgan and Harold, Stanley formed Morgan Stanley on September 16, 1935, and it is now a major international investment firm. The organization, which has its worldwide headquarters in mid town Manhattan, New York City, employs more than 55,000 people and conducts business in 42 nations. To individuals, organisations, financial institutions, and governments, it offers investment banking, investment management services, securities, and wealth management services around the world to reach their financial objectives by mobilizing capital.
