Global Economic Midyear Outlook

  • 31 May 2024

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.