What are current trends in India’s GDP growth forecast?

Recently, India’s GDP Growth Forecast for current financial year was lowered to 7.2 percent by Morgan Stanley. It marked a reduction by 40 basis points, as compared to last forecast. Growth forecast was lowered in light of a slowdown in global growth.
Trends in India’s GDP Growth:

• Morgan Stanley has also reduced the Growth Forecast for 2023-24 by 30 basis points to 6.4%. India’s overall exports to GDP is at 21 percent.
• India is witnessing a slower-than-expected global growth trend, which is likely to delay full-fledged growth recovery.
• It would also weaken the external demand.
• The downside risks are emerging due to weaker-than-expected global growth trend, faster tightening of financial conditions and supply-side-driven commodity price increase.
• According to Morgan Stanley, Consumer Price Index inflation is likely to be about 6%, starting from November 21, 2022. Risks for the same could be due to unexpected changes in food price trajectory.
• CPI inflation on an average be at 6.5 percent, as opposed to 7 percent earlier in the fiscal year 2022-23. For the next fiscal, CPI will remain at 5.3 percent.
• The terminal policy repo rate is likely to reach at 6.5 percent by April 2023, against the current level of 4.9 percent.

However, Morgan Stanley remained constructive on medium-term growth path of India, despite the slower global growth trend. It expects supportive supply-side policy reforms, which would help the Indian economy to grow above pre-covid-19 pandemic rates in 2022 and 2023.