Morgan Stanley cuts India’s GDP growth forecast, down from 6.7% to 6.3%
New Delhi| Morgan Stanley, a multinational investment bank and financial services company, has revised India’s GDP growth forecast for the current financial year (FY25) to 6.3 per cent from its earlier estimate of 6.7 per cent.
GDP growth rate projections have been downgraded following a slowdown in growth in the quarter ending September 2024. India’s GDP growth slowed year-on-year (YoY) to 5.4 per cent in the July-September quarter of 2024, its lowest level since March 2023.
This was well below the 6.7 percent growth recorded in the previous quarter and even lower than Morgan Stanley’s forecast of 6.3 percent and consensus estimate of 6.5 percent. The slowdown was evident in both private consumption and capital expenditure (capex). On the other hand, the services sector showed resilience, growing at 7.1 per cent, while the industry sector lagged at 3.9 per cent, with the manufacturing and power sectors lagging significantly behind.
Despite this slowdown, Morgan Stanley believes growth is likely to bottom out and is forecast to rebound in the second half of FY25. The report highlighted signs of recovery in growth in October and November, driven by a strong festival and wedding season, and projected GDP growth to average 6.6 percent in the second half of FY25.
