Morgan Stanley Upgrades India's Growth Forecast for FY27 Amid Strong Demand
Synopsis
A recent Morgan Stanley report projects an optimistic growth forecast for India, predicting a rise to 6.5% for FY27. This forecast is driven by resilient domestic demand and improvements in external factors, suggesting a robust economic outlook.
Key Takeaways
Morgan Stanley forecasts India's growth at 6.5% for FY27.
Indicators show strong domestic demand momentum.
External demand outlook improving, especially for goods exports.
Base year for GDP updated to 2022-23 for accurate representation.
FY26 growth estimate revised to 7.6% .
New Delhi, March 2 (NationPress) A report from Morgan Stanley released on Monday anticipates a robust growth trajectory for India, predicting an increase in its growth forecast to 6.5 percent for FY27. This optimism is attributed to sustained positive factors from both domestic and international demand.
In its analysis, the global brokerage expressed confidence in India's growth prospects for FY27.
“The latest high-frequency indicators are demonstrating resilience, suggesting a strengthening in domestic demand. We believe that supportive policies will continue to foster growth within a stable macroeconomic environment,” stated the financial services company.
Regarding external demand, an improvement is expected, particularly for goods exports, as tariff rates have significantly decreased from their recent high of 50 percent. Additionally, India is making strides in finalizing several free trade agreements (FTAs).
The revised GDP series estimates both real GDP and real GVA at 7.8 percent for Q3 FY26, showing a moderation compared to previous quarters.
The government has updated the base year for the GDP series, now set at 2022-23 (up from 2011-12), to provide a more accurate depiction of the evolving economic structure. The re-based series includes historical data from QE June 2022.
This updated base aims to enhance the assessment of the economy’s underlying growth momentum by improving the representation of the informal and digital sectors, employing better estimation methodologies like double deflation and the supply-use table framework, which align with international standards. It also incorporates new data sources such as GST collections, e-Vahan data, and PFMS.
For the entire financial year (FY26), growth is projected at 7.6 percent, slightly exceeding the previous estimate of 7.4 percent from the old series.
Point of View
This report from Morgan Stanley highlights the resilience of India's economy, showcasing potential for sustained growth driven by both domestic and international demand. The proactive measures taken by the government to revise GDP metrics further support a more accurate economic outlook.
NationPress
10 May 2026
Frequently Asked Questions
What is Morgan Stanley's growth forecast for India in FY27?
Morgan Stanley projects a growth rate of 6.5% for India in FY27.
What factors are driving India's economic growth?
The growth is driven by strong domestic demand and improving external demand, particularly in goods exports.
What changes were made to India's GDP calculation?
The base year for GDP calculations has been updated from 2011-12 to 2022-23 to better reflect the current economic structure.
How has the tariff situation impacted India's exports?
Tariffs have significantly decreased from a peak of 50%, which is expected to improve the outlook for goods exports.
What is the estimated growth for the full financial year FY26?
The estimated growth for FY26 is projected at 7.6%, slightly higher than the previous estimate of 7.4%.
