India’s GDP growth to rise to 7.5% in 2018: Morgan Stanley

The Indian economy is expected to witness cyclical growth recovery, with real gross domestic product (GDP) growth likely to accelerate from 6.4% this year to 7.5% in 2018 and further to 7.7% in 2019. According to global financial services major Morgan Stanley, corporate return expectations and balance sheet fundamentals are improving, and a strengthening financial system should be able to meet investment credit demand.

The global brokerage is confident about prospects for a recovery in private capital spending as demand conditions are improving post demonetisation and goods and services tax (GST) implementation. On prices, the report said the cyclical growth recovery and normalising food prices should drive a pick-up in headline inflation.

Against the backdrop of better macro outlook, we expect the RBI to hike in the second half of fiscal 2019, it noted. The Reserve Bank of India in its fifth bi-monthly review for the current fiscal on 6 December, kept repo rate unchanged at 6 % and reverse repo at 5.75 %.

Translate »