India will contribute to global GDP over 2023-24
Morgan Stanley has reported that the Indian economy is experiencing a broad-based recovery in demand, which is in contrast to the weakness observed outside Asia. The report attributes India’s growth to a combination of cyclical and structural factors and predicts that it will contribute 16% of the global GDP over 2023-24.
The report further states that recent indicators point towards a strong and broad-based recovery in India, with sustained growth rates of above 6%. The Purchasing Manager’s Index (PMI) and manufacturing PMI are both at a decade-high, while passenger vehicle sales, real goods and services tax collections, and services exports have all exceeded pre-Covid levels.
Morgan Stanley believes that India’s recovery is strong and broad-based, and is benefiting from a combination of cyclical and structural tailwinds. The country’s strong domestic demand and services export will compensate for the weakness seen in goods export.
Additionally, the balance sheets of Indian companies are healthy, which is supporting the domestic demand. Moreover, macro stability indicators like inflation and current account deficit are in the policymakers’ comfort zone, allowing economic expansion to continue without a monetary policy being brought into restrictive territory.
The bank predicts that India’s growth outlook is the strongest among large economies, and it will contribute 16% to global GDP growth over 2023-24.
