Morgan Stanley’s confidence in India’s economy increased
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Morgan Stanley: The entire world economy is facing economic difficulties and uncertainty. The world’s superpowers are troubled by rising inflation. On the other hand, the situation in China has also become worse. In such a situation, the Indian economy is showing positive energy. The whole world is looking at India as an economic catalyst. Many big companies of the world have moved away from China towards India. In such a situation, economists of Morgan Stanley, the world’s largest economic agency, have made big predictions about India. He claims that India’s economy will grow at the rate of eight percent.
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What is the agency’s claim?
Economists at Morgan Stanley have said that India’s current economic growth, driven by investment, looks like 2003-07. At that time the economic growth rate was more than eight percent on average. Morgan Stanley, in a report ‘The Viewpoint: India – Why This Feels Like 2003-07’, said that after a decade of continuous decline in investment relative to GDP, capital expenditure has now emerged as the key driver of growth in India. The report said that we think there is enough scope for a capital expenditure cycle and hence the current uptrend is similar to that of 2003-07. Economists at Morgan Stanley said that the current boom is due to increase in investment compared to consumption. Initially this was supported by public capital expenditure, but private capital expenditure is also increasing. Similarly, consumption was first supported by urban consumers and later rural demand also increased. The economy has also been supported by increasing market share in global exports and macroeconomic stability.
Big claim made regarding 2026-27
It has been said in the report that we believe that the current growth is due to increase in investment compared to GDP. In a similar growth cycle during 2003-07, investment as a proportion of GDP increased from 27 percent to 39 percent. Investment in comparison to GDP was at its highest level till 2011, after which it declined. This decline was seen from 2011 to 2021, however after that the situation started changing and now investment in comparison to GDP has reached 34 percent. The report said that it is estimated to be 36 percent by the financial year 2026-27.
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