Morgan Stanley revises India's GDP growth to 7.2% in FY23

by IANS |

Chennai, July 18 (IANS) With the global economic growth slowing, Morgan Stanley in its research report has revised India's gross domestic product (GDP) growth estimates to 7.2 per cent in FY23 from 7.6 per cent and 6.4 per cent for FY24 from 6.7 per cent.

According to the report, the consumer price index (CPI) to average 6.5 per cent, whereas the earlier estimate was 7 per cent.

In its latest research report, Morgan Stanley said it sees three aspects -- slower trade growth, tighter financial conditions and changes in commodity prices.

While there are signs of moderation in exports, Morgan Stanley said the domestic demand will provide a partial offset with the support from government's supply side response and the reopening vibrancy to help the informal sector.

The report said, the moderation in commodity prices and swifter correction in domestic food prices will improve the near term inflation.

"We now expect CPI inflation to average 6.5 per cent in F23 (vs. 7 per cent earlier)," Morgan Stanley said.

On the monetary policy, the report said the policy normalisation will continue pegging the terminal repo rate at 6.5 per cent by April 2023.

"We see downside risks emanating from a weaker than expected global growth trend, supply-side-driven commodity price shock and faster than warranted tightening of financial conditions," Morgan Stanley said.

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