Global Economic Midyear Outlook

According to Morgan Stanley, the global investment bank’s latest report released on May 30th attributed India’s firm growth to three megatrends -global offshoring, digitalization and energy transition.

Key Points

India's already strong and surging growth may become more broad-based, encompassing both consumer and business spending.
The report forecasts 6.8 per cent growth in 2024 (against RBI’s 7 per cent), and 6.5 per cent the next, and thinks inflation will stay within policymakers’ comfort zone for India
Retail inflation in April 2024 was recorded at 4.83 percent, the lowest in the past 11 months. While this is within the RBI’s comfort range of 2-6 percent, it remains above the ideal 4 percent target.
According to report, there is potential for a faster-than-expected recovery in capital expenditures (which increased multifold in the past decade), driven by a stronger business environment and policy reforms.
The report sees global economic growth of 3.1% in 2024 and 2025.
Global growth remains steady and inflation is slowing, despite data volatility and shifting rate expectations in the first half.
Despite overall stability, the U.S. may experience a slowing, as growth elsewhere picks up.
China is struggling with deflation but continuing to grow, and Japan remarkably has shifted from stagnation to growth.