1. Morgan Stanley sees all growth drivers in place by FY-19 in India

Morgan Stanley sees all growth drivers in place by FY-19 in India

Global firm Morgan Stanley has time and again reiterated its bullishness on the Indian economy, saying that the country is slated to see tremendous growth in the near future.

By: | Updated: November 27, 2017 2:01 PM
Chetan Ahya of Morgan Stanley says that all the drivers of growth would be in place by FY-19 in India. (Image: Reuters)

Global firm Morgan Stanley has time and again reiterated its bullishness on the Indian economy, saying that the country is slated to see tremendous growth in the near future. In an interview to CNBC TV18, Chetan Ahya, Co-Head of Global Economics & Chief Asia Economist, Morgan Stanley said the house is expecting the second quarter India’s Q2 GDP number growth to be around 6.5%, which will confirm a turn in the growth environment. “The moderation seen in the data points in October could be a temporary downtick, while the underlying fundamentals of the economy are good enough to bring recovery back again,” he told the channel.

Further, he said that all the drivers of growth would be in place by FY-19. “The private capex joining in will bring the strength in India growth numbers that we are forecasting for it to go to 7.5 percent in March FY19,” he pointed out in the same interview.

Last week, Morgan Stanley said that India is uniquely placed among emerging markets and  has a very clear reform agenda to address long-standing issues. In an interview to CNBC TV18, Jonathan Garner, chief Asian and emerging markets equity strategist at Morgan Stanley said, “What we are seeing India is probably uniquely amongst emerging markets (EM). It has a very clear reform agenda to address long standing issues particularly around infrastructure spending. We have also seen, I have been waiting for it for 20 years, the implementation of the goods and services tax (GST) this year. We have seen the recapitalisation of the PSU banks.”

A recent Morgan Stanley report says that India is likely to be the world’s fastest-growing large economy in the next 10 years, driven by digitisation, favourable demographics, globalisation and reforms. According to the global financial services major, the trend line in India’s annual GDP growth has been accelerating to 6.9 per cent in 2000s, from 5.8 per cent in the 1990s, and this momentum is likely to continue in the next decade as well.

Morgan Stanley expects digitisation will provide a boost of 50-75 bps to GDP growth and forecast that India will grow to a $6-trillion economy and achieve upper-middle income status by 2026-27. “We think India’s stock market could be among the world’s best performers in the next 10 years, leading to India’s market cap rising from around $2 trillion to around $6 trillion,” the report stated.

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