India's GDP growth momentum stays strong: Morgan Stanley

08 Sep '17

2 min read

Though disruptions related to the goods and services tax (GST) resulted in economic activity in India losing its steam, the growth momentum remains strong and the country may still witness a 6.7 per cent GDP growth in the current fiscal, according to a recent Morgan Stanley report. In April-June, economic growth slipped to a three-year low of 5.7 per cent.

“Indeed, we remain skeptical that the GDP statistics are fully reflecting the underlying growth trends in the economy,” media reports quoted a Morgan Stanley research note as saying. There are indications that end demand is holding up well and is running counter to the slowdown exhibited in the national accounts. Despite demonetisation and implementation of GST leading to a deceleration in growth momentum, growth will re-accelerate, it said.

Assuming June 2017 to be probably the lowest in growth in this cycle, the company expects the GDP growth to accelerate by almost 200 basis points to 7.5 per cent year-on-year in March 2018 quarter.

The company has revised its previous growth estimates of 7.6 per cent and 8.0 per cent for calendar years 2017 and 2018 respectively to 6.4 per cent and 7.4 per cent. The revised growth estimates for fiscals 2018 and 2019 are 6.7 per cent and 7.5 per cent respectively. (DS)

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