Morgan Stanley Lowers India GDP Growth Forecast for FY27 to 6.2%
In April 2026, Morgan Stanley lowered its real Gross Domestic Product(GDP) projection for India by 30 basis points (bps) to 6.2% for Financial Year 2026-27 (FY27) from its previous estimate of 6.5%, due to ongoing conflict in West Asia.
Key Projections:
Q1FY27: The firm has further projected that India’s GDP growth rate at 5.9% Year-on-Year (YoY) basis in 1st Quarter(Q1: April-June) of FY27.
In April 2026, Morgan Stanley lowered its real Gross Domestic Product(GDP) projection for India by 30 basis points (bps) to 6.2% for Financial Year 2026-27 (FY27) from its previous estimate of 6.5%, due to ongoing conflict in West Asia.
Key Projections:
Q1FY27: The firm has further projected that India’s GDP growth rate at 5.9% Year-on-Year (YoY) basis in 1st Quarter(Q1: April-June) of FY27.
- This projection for Q1FY27 is based on factors like: softening of industrial activity, margins compress and tightening of external financing tightens.
Inflation: The ratings projected CPI inflation to average at 5.1% Y-o-Y in FY27 due to higher production costs, currency weakness and firmer food goods.
CAD: Due to higher oil prices, India’s Current Account Deficit (CAD) is expected to widen by around 150 bps to nearly 2.5% of GDP in FY27 compared to nearly 1% in last financial year.
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- Fiscal deficit is projected at around 4.3% of GDP.
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