After S&P Global, Morgan Stanley has revised its GDP growth forecast upwards for the financial year 2024-25 (FY25) to 6.8 per cent up from its previous estimate of 6.5 per cent. The firm also revised its growth forecast for the ongoing financial year, FY24, to 7.9 per cent.
The revised projections come taking note of an optimistic outlook on Bharat’s economic trajectory, with Morgan Stanley accentuating the nation’s strength and stability as hallmarks of the current cycle.
The firm predicts a shallow easing cycle in monetary policy, determined by continued traction in industrial and capital expenditure activities.
As per Morgan Stanley, the outlook for Bharat’s GDP growth remains robust, with the probability that growth will track around 7 per cent in the fourth quarter of the financial year 2023-24 (QE Mar-24).
This growth momentum is likely to be broad-based, with the gaps between rural-urban consumption and private-public capital expenditure narrowing in FY25.
The firm also forecasts a favourable inflation trajectory, with recent trends indicating a softening in headline inflation. Food inflation, which carries significant weight in the CPI basket, has moderated, providing relief from supply-side shocks.
Furthermore, core inflation has seen meaningful moderation, driven by easing in supply chains and subdued price pressures.
Looking ahead, Morgan Stanley expects headline inflation to average 4.5 per cent in FY25, down from 5.4 per cent in FY24, while core inflation is projected to remain muted at 4.1 per cent.
