27 March 2024 – Morgan Stanley, a leading global brokerage firm, has revised its forecast for India’s GDP growth in fiscal year 2025 (FY25), citing sustained momentum in industrial and capital expenditure activities. The upward revision reflects optimism regarding the country’s economic trajectory amidst ongoing recovery efforts.
The revised GDP growth estimate for FY25 now stands at 6.8 percent, up from the previous projection of 6.5 percent. Notably, Morgan Stanley had already forecasted a robust GDP growth rate of 7.9 percent for fiscal year 2024 (FY24). According to the firm’s report, GDP growth is anticipated to maintain a trajectory of around 7 percent in the final quarter of FY24, with Gross Value Added (GVA) growth at 6.3 percent, contributing to the overall growth momentum.
The report emphasizes that the upcoming growth phase is expected to be comprehensive, with minimal disparities between rural and urban consumption patterns, as well as between private and public capital expenditure. Morgan Stanley foresees a narrowing of these gaps in FY25, suggesting a more balanced growth landscape across sectors.
Moreover, the firm predicts that the economic expansion will be characterized by sustained productivity growth, contributing to macroeconomic stability. Projections indicate that Consumer Price Index (CPI) inflation will hover around 4.5 percent in both FY25 and FY26, while the current account deficit is forecasted to remain at 1 percent of GDP during the same period.