Morgan Stanley has upwardly revised their economic growth forecast for India for fiscal year 2024 after April-June quarter data showed it grew at its quickest pace in a year

The multinational investment bank raised India’s growth forecast to 6.4 per cent from its earlier estimate of 6.2 per cent. It attributed the growth forecast revision to robust domestic demand. India’s GDP growth for the June quarter came at 7.8 per cent, higher than Morgan Stanley’s expectation of 7.4 per cent.

“This was above our (7.4 per cent) but in line with consensus (7.8 per cent) expectations; the upside surprise was led by sharper-than-anticipated growth in private consumption,” Morgan Stanley said in a report. “The robust momentum in domestic demand conditions continues to reflect in the GDP numbers, which have surprised on the upside for two consecutive quarters,” it said, citing firm GST collections, credit growth, and Purchasing Managing Index.

It expects the resilience to be sustained. Stronger balance sheets across the economy and the government’s pro-active supply-side responses are likely to provide a secure foundation for a strong multiyear growth cycle.

However, it cautioned risks lie in weak global growth conditions, trends in global commodity prices and “idiosyncratic” weather conditions.