India’s economy is forecast to grow by 12.1pc in FY2022 (ending March 31, 2022) due to an expected recovery in domestic and export demand, according to a Morgan Stanley report. The forecast for FY2023 has increased by 50 basis points to 6.7pc.
Morgan Stanley expects the Indian economy to show synchronous recovery during the year that will lift domestic and export markets. The increased demand would raise capacity utilization, which can accelerate private capital expenditures.
In February, Oxford Economics also revised India’s economic growth projections to 10.2pc for 2021 against the previous 8.8pc level, noting lower COVID-19 risks and a shift in the monetary policy as essential contributors to the country’s growth. India’s 2021-2022 Union Budget is expected to create a positive effect for the private sector, which projects a slower consolidation in FY2023 compared to the more conservative government figures.
Oxford Economics indicated that the Reserve Bank of India (RBI), may have to limit its growth commitment if inflation risks emerge. RBI has projected a GDP growth rate of 10.5pc for FY2022 due to recovery in economic activities. The current fiscal ending this month is expected to show a GDP fall by 7.7pc against the previous year.