Morgan Stanley expects GDP growth to accelerate to 18.8 percent
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In the September 2021 quarter, Morgan Stanley expects GDP growth to accelerate to 18.8 percent. From there, growth momentum will pick up, lifting India's GDP to almost 6 percent above its pre-Covid path by end-2022, it said.
Capital expenditure will be one of the key drivers of growth in India, which will boost income and employment prospects in the country, investment bank Morgan Stanley said in its latest Asia Pacific-specific research note.
India is on the "cusp of a virtuous cycle" as strong capex and productivity is taking off in the country, it said. "Led by manufacturing, we see capex to GDP ratios rising 6 ppt from F21 to F26," Morgan Stanley added.
This will allow strong rates of growth while keeping macro stability risks at bay, it said, adding that exports growth "has been strong and will remain so".
According to Morgan Stanley, India's growth momentum is gathering pace again after the easing of restrictions from mid-June. High-frequency indicators are signalling a robust recovery, with all components reaccelerating in tandem.
