Morgan Stanley downgraded India’s growth forecast to 7.6% from 7.9% for FY2023 amid a slowdown in global growth, higher commodity prices and risk aversion in global capital markets.
This 7.6% forecast is a baseline forecast for India while its bearish and bullish growth projections are 6.7% and 8%, respectively. For FY24, it lowered its growth forecast to 6.7% from the 7% estimated earlier.
However, the Indian economy will expand at above pre-pandemic growth rates in FY23 and FY24. On the global front, it projected growth at 2.9% in the calendar year 2022 as compared to 6.2% growth in 2021. Within Asia, India would be the economy which will be most exposed to upside risks to inflation.
CPI (Consumer Price Index) inflation is expected to be 6.5% for FY23. The current account deficit to widen to a 10-year high of 3.3% of GDP (Gross Domestic Product) in FY23.