New Delhi, May 21
Global financial services major Morgan Stanley on Wednesday upgraded its GDP growth forecast for India at 6.2 per cent in FY26 and 6.5 per cent for FY27, saying that domestic demand trends will be the key driver of the country's growth momentum amid lingering uncertainty on the external front.
The earlier growth forecast was 6.1 per cent for FY26 and 6.3 per cent for FY27.
“We expect growth to remain resilient, supported by strength in domestic demand amidst uncertainty from external factors,” said the global brokerage in its note.
“Policy support is likely to continue through easier monetary policy while fiscal policy prioritises capex. Macro stability expected to be in comfort zone with robust buffers,” it added.
Within domestic demand, the brokerage expects consumption recovery to become more broad-based with urban demand improving and rural consumption levels already robust.
“Within investments, we see public and household capex driving growth while we expect private corporate capex to recover gradually,” it noted.
Morgan Stanley expects headline inflation to remain benign thanks to lower food inflation and the range-bound trend in core inflation.