India is likely to be the fastest-growing Asian economy in the Asian region in 2022-23, according to analysts at Morgan Stanley, who expect the expect India’s gross domestic product (GDP) growth to average 7 per cent during this period – the strongest among the largest economies – and contributing 28 per cent and 22 per cent to Asian and global growth, respectively. This makes India the fastest-growing Asian economy in the Asian region in 2022–2023. They claimed that due to the release of dormant demand, the Indian economy is poised for its strongest performance in more than a decade.
India’s GDP growth: Key Points
According to Chetan Ahya, chief Asia economist at Morgan Stanley, the most significant change in India’s structural narrative is the obvious shift in policy emphasis in favour of increasing the economy’s productive potential and India’s GDP growth. He claimed that policymakers have adopted a number of changes that will spur an uptick in the private capex cycle, aid to unleash a potent productivity dynamic, and usher in the start of a virtuous cycle.
This confidence in India’s GDP growth has been greatly aided by a decline in commodity prices, particularly those of crude oil. With oil and commodities prices down between 23 and 37% since their peak in March 2022, Morgan Stanley predicts that macro stability indicators will return to a comfortable level and that the Reserve Bank of India (RBI) may not need to raise rates substantially in the near future.
India’s GDP growth: RBI’s measures
Since May 2022, the RBI has hiked rates cumulatively by 140 basis points (bps) in quick succession, lifting policy rates now to 5.4 per cent, which is a touch above pre-pandemic levels of 5.1 per cent. Along with the decline in commodity prices, the economy’s reopening earlier this year has also contributed to the recovery of India’s GDP growth. According to Morgan Stanley, demand has recently surged as a result of rising mobility and sustained levels above pre-Covid levels.
About Morgan Stanley:
The corporate headquarters of the global American financial services and investment management firm Morgan Stanley is located at 1585 Broadway in Midtown Manhattan, New York City. Clients of the Morgan Stanley firm, which has offices in more than 41 nations and more than 75,000 workers, include businesses, governments, institutions, and people. On the 2021 Fortune 500 list of the biggest American companies by total revenue, Morgan Stanley came in at number 61.
India’s GDP growth: Important Takeaways
- Chief Asia economist at Morgan Stanley: Chetan Ahya
- Governor of RBI: Shaktikanta Das
