Morgan Stanley has raised its sights on India’s economic prospects, predicting that GDP growth in fiscal year 2027 could comfortably exceed the 6.5% forecast thanks to vigorous domestic and global demand. In a statement issued Monday, the international brokerage expressed unwavering optimism about the subcontinent’s trajectory.
High-frequency data underscores a robust domestic demand revival, with consumption and investment indicators flashing green. The firm anticipates that prudent policymaking will sustain this momentum within a stable macroeconomic framework. ‘Recent indicators remain strong, signaling improved household spending,’ the analysis notes.
Export horizons appear brighter too, especially for commodities, as import duties have eased significantly from recent highs. India’s proactive diplomacy has yielded multiple FTAs, opening new avenues for trade expansion amid a challenging global landscape.
Adding to the positive narrative, revised GDP figures reveal that Q3 FY26 saw 7.8% growth in both real GDP and GVA, marginally lower than the prior quarter. This follows the adoption of 2022-23 as the new base year, a move designed to capture the economy’s shift towards services, digitalization, and formalization.
The updated series, effective from Q1 FY23, integrates sophisticated methodologies such as double deflation and supply-use frameworks, alongside fresh inputs from GST, electric vehicles, and PFMS. Consequently, FY26’s full-year growth estimate has been revised upwards to 7.6% from 7.4%.
Morgan Stanley’s forecast not only reflects current strengths but also India’s adaptive economic strategies, suggesting a trajectory that could redefine emerging market benchmarks by 2027.