Business
Morgan Stanley Predicts India’s GDP Growth to Slow to 6.5% in FY2025
Morgan Stanley Predicts India’s GDP Growth to Slow to 6.5% in FY2025
According to international banking giant Morgan Stanley, India’s economic growth would decline from 6.9% expected for FY2024 to 6.5% in FY 2025. “Concerning development, we guess that it will keep on being vigorous. As of December 2023, GDP is projected to ascend at 6.5%, albeit diminishing from 7.7% in the first half of FY2024. In its latest exploration report on the Indian economy, Morgan Stanley expressed, “We anticipate that GDP should average 6.9% in FY2024 and 6.5% in FY2025.”
The Monetary Policy Committee of the Reserve Bank of India has modified its GDP projections for FY 2025, bringing them down from 7.3% for FY24 that the National Statistical Office had anticipated. Remarkably, the public authority expanded its conjecture for ostensible Gross domestic product development meanwhile financial plan set on February 1 free from 8.9 percent in 2023-24 to 10.5%, without representing the pace of expansion.
In terms of macro-stability, Morgan Stanley anticipated that title expansion would average 4.5 percent in FY2025 and 5.4% in FY2024, with a reach bound gauge of 5.0-5.2 percent in the primary quarter of FY24, supported by a good base impact.
Positive Economic Indicators Signal Growth Amidst Global and Domestic Challenges
With the strength of services exports and the declining price of commodities globally, particularly oil, the current account deficit is expected to stay benign and track at 1.2% of GDP in FY24 and 1.3% of GDP in FY25. In terms of monetary policy, Morgan Stanley stated, “In our base case, we build in a shallow rate cut cycle of 50 basis points from June 2024, even as we continue to remain vigilant of risks from stronger-than-expected growth (strong credit growth), which could postpone the rate easing cycle.”
Also Read: India Expects 9.5% Salary Increase in 2024; Infrastructure and Manufacturing Sectors Lead Growth
Morgan Stanley reported that although economic stability is still comfortable and reflects strength in the fundamentals, domestic demand strengthened in January. “We continue to view the economy favorably. Worldwide events and the May 2024 elections pose risks, the statement read.
In January, domestic demand increased both sequentially and YoY as it slowly increased to a three-month high. GST collections increased to Rs 1.7 lakh crore, the second-highest amount ever, gaining 10.4% annually, while the Manufacturing PMI improved to 56.9, continuing to be expansionary since July 21. Regarding external demand, exports increased 3.1% in January compared to 1% in the previous month.
