India Will Become Asia’s #1 Economy By 2022-2023; 7% Growth Expected By Morgan Stanley
At a time when the global economy looks bleak and experts all over anticipate a global recession inching closer, economists at one of the largest financial services institutions and brokerages in the world Morgan Stanley have indicated that India could emerge as the strongest economy in Asia in the year 2022-23.
Last week, the country’s central bank Reserve Bank of India raised the benchmark lending rate by 50 basis points for the consecutive time to keep a check on the mounting inflation, and retained India’s GDP projection in financial year 2022-23 to 7.2%.
Morgan Stanley also sees India’s economy growing in similar lines in 2022-23, and expects it to contribute hugely to Asia’s overall growth in the ongoing year.
Here’s everything you need to know.
Morgan Stanley Enthusiastic on India’s Economic Growth
The American brokerage expects the Indian economy to grow an average 7% in the ongoing calendar year 2022-23 and contribute a hefty 28% to Asia’s growth and 22% to the global growth.
This is because Morgan Stanley believes that the country’s economy is best-positioned for generating robust domestic demand, led primarily by factors like economic policy reforms, business investments, and a young workforce, among others.
“Lower corporate taxes, the production-linked incentive (PLI) scheme and India as a potential beneficiary of supply chain diversification will catalyse and sustain domestic demand, especially in investment,” stated the economists at MS.
In FY22, the Indian economy grew 9.2%, recovering sharply from a 6.6% downfall in FY21 due to the Covid-19 lockdowns impacting growth.
The GDP for 2022-23 is expected to grow at a 8%-8.5% rate.
“The economy is set for its best run in over a decade as pent-up demand is being unleashed,” MS said, as Asia’s third-largest economy’s healthy corporate balance sheets and business confidence paints a better outlook for the country’s investment space.