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News India Live, Digital Desk: Global Financial Services Head Morgan Stanley on Wednesday increased its gross domestic product growth rate for India by 6.2 percent in FY 26 and 6.5 percent for FY 27. The company said that the trend of domestic demand will be the major driver of the country’s development pace amid uncertainty on the external front.
Earlier, it was estimated to increase 6.1 percent for FY 26 and 6.3 percent for FY 27.Global brokerage said in his note, “We hope that the development will be strong in domestic demand amid uncertainty from external factors.”
It states, “Policy support is likely to continue through easy monetary policy, while the fiscal policy prioritizes capital expenditure. It is expected to live in a comfortable area of macro stability with strong buffer.”
Under domestic demandKarez hopes that the improvement in urban demand and the level of rural consumption will already improve consumption with more wider basis.
It states, “In terms of investment, we are witnessing promotion of growth from public and domestic capital expenditure, while we hope that private corporate capital expenditure will gradually improve.”
Morgan Stanley hopes that the main inflation will remain soft due to a decrease in food inflation and being limited in main inflation.
According to the note, more monsoon IMD forecast for 2025 will support the crop weather, which will ensure that the food prices remain soft.
The note states, “Thus, we hope that inflation will be decisively below the 4 percent mark in the next few months and an average of 4 percent (year -to -year) in FY 2026 and 4.1 percent in FY 2027.”
It also expects that the RBI will react with intensive spontaneity cycle on the basis of slow growth, while inflation will be under control.
Brokerage said, “Thus, we expect a cumulative spontaneity of 100 BPS with two and rate cuts of 25 BPS in this rate spontaneity cycle.”
In addition, it is expected that RBI will continue to relax in liquidity and other aspects of regulation.
The note states, “On the fiscal policy front, we hope that the consolidation path prescribed in the budget will be maintained in our Aadhaar case, in which focusing on increasing capital expenditure.”
Between better possibilities for inter-country trade deals, the risk to development scenario remains equally balanced. The positive side is that the rapid solution to trade and tariffs related to trade and tariffs can improve investors’ perception and capital expenditure cycle.
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