India will be the Fastest Growing Asian Economy in FY 22-23, Says Morgan Stanley

FDT Bureau

As expected/predicted by the Ply Reporter a few months before (in the month of June/July), the recession is in the minds of people because mass media is discussing it on priority. It has said the Indian economy is not in recession, but if you see the situation in Sri Lanka, Pakistan, and other neighbouring countries, it will make you nervous. The positive outlook has been expected for the recovery of domestic demand and supply in wood panel industry from August 15 onwards. The study done by financial institutions also justify the hints given by the Ply Reporter.

Morgan Stanley’s recent study indicates that the Indian economy will be the fastest growing in Asia in FY 2022–23, with the GDP growth at 7%, which would be the strongest contributing to 28% and 22% to Asian and global growth, respectively. "We have been constructive on India’s outlook. The recent strong data increases our confidence that India is well positioned to deliver domestic demand," wrote Chetan Ahya, chief Asia economist at Morgan Stanley, in a recent co-authored note.

According to him, the key change in India's structural development is a clear shift in policy change that is helping the economy's productivity. A significant portion of this optimism is coming from a drop in commodity prices, particularly crude oil, which has come down by 23–37% since March, when it was observed at its peak. He further expects that economic activity will return to the comfort zone and the Reserve Bank of India (RBI) will avoid aggressive interest rate hikes. The stable interest rate will increase the flow of money in the market that will help the economy grow. Since May, the RBI has hiked rates cumulatively to 5.4 per cent, up from the pre-pandemic level of 5.1 percent.

Besides, drop in commodity prices, the reopening of the economy earlier this year has also supported the economic recovery. The demand has been increasing as mobility has increased and remained above pre-COVID levels in recent months. "The strength of the recovery is showing a comfortable scenario ahead and represents the strongest performance of the economy in almost a decade," added Morgan Stanley. "What’s more, it is the breadth of recovery where we are seeing growth in almost all spheres, which is very encouraging," it adds.