In its latest analysis, Morgan Stanley Research projects India’s GDP growth for FY25 to moderate to 6.5%, down from the 6.9% projected for FY24. Despite this moderation, the report maintains a constructive outlook on the Indian economy, citing improvements in domestic demand and macro stability.
Key Points from Morgan Stanley Research
- Growth Projection: GDP growth for Q3 FY24 is expected at 6.5%, a slight slowdown from the first half of the financial year.
- Macroeconomic Stability: Strength in fundamentals and improved domestic demand contribute to macro stability.
- Current Account Deficit: Supported by robust services exports and declining global commodity prices, especially oil, the current account deficit is expected to remain benign.
![Morgan Stanley Projects India's GDP growth for FY25 to 6.5%](https://st.adda247.com/https://currentaffairs.adda247.com/wp-content/uploads/multisite/sites/5/2024/02/22112953/1708538726-8659.jpg)
ICRA Highlights Sequential Moderation in GDP Growth
Meanwhile, ICRA forecasts a sequential moderation in year-on-year GDP growth to 6% in Q3 FY24 from 7.6%, primarily influenced by the agriculture and industry sectors. The report also notes a slowdown in investment activity, with government capital expenditure witnessing a slight dip in the last quarter.
Key Points from ICRA Report
- GDP Growth Projection: Sequential moderation in GDP growth to 6% in Q3 FY24 from 7.6%.
- Investment Activity: Government capital expenditure declined slightly in October-December 2023, indicating a slowdown in investment activity.
- State Government Expenditure: Capital outlay and net lending of state governments shrank by 3.9% year-on-year, after a significant surge in the previous quarter.