Morgan Stanley lifts India growth view to 6.4 pc

Morgan Stanley lifts India growth view to 6.4 pc


Morgan Stanley raised India's FY10 growth forecast to 6.4 per cent on a higher-than-expected August industrial output and said if the data
continue to surprise on the upside policy rates could be lifted before end-2009.

Morgan Stanley had previously forecast growth of 5.8 per cent and expected policy rates to be lifted by January 2010.



Morgan Stanley expects the Reserve Bank of India (RBI) to hold rates at its Oct. 27 quarterly monetary policy review, but sees a "more than even" chance of a hike in banks' cash reserve ratio as a tool to sterilise rising capital inflows.

Industrial production rose 10.4 per cent in August from a year earlier, its fastest pace in 22 months, beating the median forecast in a Reuters poll, and July's annual growth was revised up to 7.2 per cent from 6.8 per cent.

Morgan Stanley also lifted its industrial production growth forecast for India to an average 8 per cent year-on-year in fiscal year 2009/10 from 6.4 per cent earlier, and its services sector growth view to 8.4 per cent from 8.1 per cent.

Source : Economic Times dt.15 Oct. 09