Global funding banking group Morgan Stanley has slashed India’s GDP development for 2022 to 7.4 per cent from 7.5 per cent earlier and for 2023 to six.7 per cent from 7.1 per cent within the wake of elevated inflation degree of over 6 per cent and forecast the repo price to rise to six per cent by December 2022.
Within Asia, India can be the financial system which can be most uncovered to upside dangers to inflation, given the upper power import burden and sustained power in home demand, Morgan Stanley stated in its report.
“Although we look for a modest step down from 8.1 per cent growth in India last year to 7.4 per cent this year, that deceleration is much more modest than in the rest of the world. Higher commodity prices and uncertainty are a bit of a restraint, but the underlying fundamentals remain solid.”
It expects front-loaded price hikes, “as we pencil in hikes of 50 bps each in June and August, to be followed by 25 bps increases thereafter”.
