India to lead Asia’s economic growth in next decade, says Morgan Stanley

Written by Amanda

India’s economy is set to register exponential growth in the coming years led by strong exports and corporate earnings. (Photo credit: PTI)

As global confidence in India rises in comparison to China, the country is expected to shoulder Asia’s economic growth led by significant internal transformation and positive forecast for key economic indicators.

New Delhi: India’s growth in the years since 2014 marked a period of significant change in less than a decade, indicating a rise in its growth over the next decade in a way that will resemble China’s growth during 2007-11, said global investment bank Morgan Stanley.

As a result, India is expected to be the prime growth driver in Asia over the next 10 years.

India’s multinational sentiment is at a high of 15 compared to China in the fourth quarter of FY22, according to a Morgan Stanley report titled ‘How India Has Transformed in Less than a Decade’. This was around five during the same period in FY2014, according to the report.

This development may be attributed to the following factors:

  • India is expected to witness a rise in manufacturing as a percentage of GDP. Morgan Stanly expects the share of industry output and investment to rise nearly 5 per cent by 2031.
  • The country’s share of global exports is expected to double by 2031 to 4.5 per cent compared to the figure for 2021, led by a 12 per cent increase in industrial exports and an 11 per cent rise in service exports.
  • The country is expected to witness a significant improvement in household income to $5,200 by 2031, compared to $2,500 in 2021.
  • India has also witnessed a significant decoupling of inflation to US dynamics as well as oil price cycles, according to the report.
  • With the government’s backing, India’s corporate sector income is expected to soar over the next decade, leading to a rise in confidence among multinational corporations. This can be seen in the strong stock market valuations in India.
  • As inflation stabilises near the 4 per cent average, India will be able to better utilise investments and monetary policy to boost growth. Moreover, the country’s monetary policy has also witnessed a decoupling from the US which may lead to a more stable repo rate going forward.
  • Lastly, the country’s current account deficit is expected to moderate to zero from a near two per cent range in 2022.

Source: news9live.com

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