Morgan Stanley Fixed-India Economics Building Stronger Recovery-107238167

MMarch26,202411:00PMGMTFoundationIndiaEconomicsAsiaPacificMorganStanleyIndiaCompanyPrivateLimited+91226118-2246+91226118-3027BuildingStrongerRecoveryUpasanaChachraWeupgradeGDPgrowthto6.8%forF2025efrom6.5%,whileChiefIndiaEconomistweexpectF2024growthat7.9%.StrengthandstabilityaretheUpasana.Chachra@morganstanley.comhallmarksofthecyclewithmacro-stabilityoutlookremainingbenign.Ashalloweasingcyclecanbeintheoffing,however,weBaniGambhirremainwatchfulofstronger-than-expectedgrowth.EconomistWeraiseGDPgrowthexpectationto6.8%inF2025from6.5%oncontinuedBani.Gambhir@morganstanley.comtractioninindustrialandcapexactivity.Exhibit1:SnapshotofKeyForecasts•WeexpectGDPgrowthtotrackataround7%inQEMar-24withGVAgrowthof6.3%andthusF2024eGDPgrowthof7.9%.GDP,YoY%F2024EF2025EF2026ECPI,YoY%•Weexpectgrowthtobebroad-basedandthegapsbetweenrural-urbanCAD,%ofGDP7.9%6.8%6.5%consumptionandprivate-publiccapextonarrowinF2025.PolicyRate,eop(%)5.4%4.5%4.5%0.9%1.0%1.0%•Thecyclewillhavemoreyearsofsteadyexpansiondrivenbyimprovement6.5%6.0%6.0%inproductivitygrowth,whichwillensuremacrostabilityremainsbenign.Indeed,weexpectCPIinflationtotrackat4.5%inF2025eandF2026eandSource:MorganStanleyResearchestimatescurrentaccountdeficitat1%ofGDPinF2025eandF2026e.Exhibit2:WeExpectGDPGrowthTrendto•ModeratinginflationtrajectoryandbenigncurrentaccountdeficitopensupRem...