Morgan Stanley Bullish on India's FY27 Growth, Sees Upside Beyond 6.5%

In a note, the global brokerage said it remains constructive on India's growth outlook for FY27.

"The incoming high-frequency indicators remain resilient, indicating an improving domestic demand momentum. We continue to expect policy to remain supportive of growth, amid a benign macro-stability environment," said the global financial services firm.

On the external demand front, it expects the outlook to improve at the margin, especially for goods exports, with tariffs coming off meaningfully from their recent peak of 50 per cent and India successfully completing a number of free trade agreements (FTAs).

The rebased GDP series pegs both real GDP and real GVA at 7.8 per cent in Q3 FY26, moderating from previous quarter levels.

The government undertook base year revision for the GDP series, with the updated base year at 2022-23 (from F2011-12 earlier), to ensure a better representation of the evolving structure of the economy. The re-based series has been made available with backdated data from QE June 2022.

The updated base aims at improving the estimation of the underlying growth momentum of the economy by ensuring a more accurate representation of the evolving structure of the economy by improved measurement of the informal and the digital sector, strengthened estimation methodologies such as double deflation, supply and use table framework, that are internationally aligned and enhanced data coverage by incorporating new sources such as GST collections, e-Vahan data and PFMS.

For the full financial year (FY26), growth is estimated at 7.6 per cent, slightly higher than the earlier 7.4 per cent projected under the old series.

- IANS