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Strong domestic demand supporting India's growth: Morgan Stanley

01:35 AM Apr 24, 2024 IST | ANI
strong domestic demand supporting india s growth  morgan stanley
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New Delhi, Apr 23: Morgan Stanley is firm on India's growth outlook, given the support it is getting from domestic demand. Citing high-frequency data, the global investment banking firm said it remains constructive on the growth outlook.

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Against that backdrop, it expects India's GDP growth to be at 6.8 per cent in the current financial year 2024-25 and 6.5 per cent in 2025-26.

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On the macro side, it anticipates headline inflation to remain supported by favourable base effects. It projected inflation to remain in a range of around 5 per cent in the second quarter, before moderating to 4.1 per cent year-on-year in the second half of 2024.

For the next financial year, it expects retail inflation to average 4.5 per cent.

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Similarly, the current account deficit is likely to remain benign, supported by strength in service exports, and remain within the policymakers comfort zone at 1-1.5 per cent of GDP in 2025-26.

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On monetary policy, it expects policy rates to remain steady at 6.5 per cent in the horizon.

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"This is on the back of a shallower and deferred rate cut cycle for the Fed on the global front and improving productivity growth, a rising investment rate and inflation tracking above the target of 4 per cent on the domestic front," it explained.

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