Morgan Stanley downgraded India’s growth forecast to 7.6% from 7.9% for FY2023 amid a slowdown in global growth, higher commodity prices and risk aversion in global capital markets. This 7.6% forecast is a baseline forecast for India while its bearish and bullish growth projections are 6.7% and 8%, respectively.
- For FY24, it lowered its growth forecast to 6.7% from the 7% estimated earlier.
- However, the Indian economy will expand at above pre-pandemic growth rates in FY23 and FY24.
- On the global front, it projected growth at 2.9% in the calendar year 2022 as compared to 6.2% growth in 2021.
- Within Asia, India would be the economy which will be most exposed to upside risks to inflation.
- CPI (Consumer Price Index) inflation is expected to be 6.5% for FY23.
- The current account deficit to widen to a 10-year high of 3.3% of GDP (Gross Domestic Product) in FY23.