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

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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 percent in FY23 from 7.6 percent and 6.4 percent for FY24 from 6.7 percent. According to the report, the consumer price index (CPI) averages 6.5 percent, whereas the earlier estimate was 7 percent.

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 the 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 percent in F23 (vs. 7 percent earlier),” Morgan Stanley said. On the monetary policy, the report said the policy normalization will continue pegging the terminal repo rate at 6.5 percent by April 2023.

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