India's economic trajectory is poised for a 6.5 percent gross domestic product (GDP) growth in the fiscal years 2023-24 and 2024-25, as indicated by the India Economic Outlook report unveiled by Morgan Stanley Research on November 14. According to the report, the nation's growth will be bolstered by robust domestic demand, supported by the solid corporate and financial sector balance sheets, along with the positive effects of ongoing policy reforms. This optimistic outlook is particularly crucial in the face of a global economic slowdown.
Despite the promising projections, the report also highlights potential challenges, such as the escalating conflict in Israel, which poses a threat to oil prices. Given that high oil prices have a cascading effect on inflation, import bills, fiscal deficits, and trade balances, these external factors could impact India's economic landscape.
In the face of such uncertainties, Morgan Stanley remains confident that India's growth will be resilient. The report anticipates headline inflation to ease, reaching 4.9 percent in the fiscal year 2024-25 and 5.4 percent in the fiscal year 2023-24. This measured inflation forecast aligns with the Reserve Bank of India's own projection of a 6.5 percent GDP growth for the fiscal year 2023-24, underscoring a consensus among financial institutions regarding India's economic performance in the coming years.
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