New Delhi, Jan 14 (PTI) The Indian economy is expected towitness an average GDP growth of 7.3 per cent over 2020-22,says a Morgan Stanley research report.
According to the global financial services major, thestructural growth story in India remains strong from a mediumterm perspective.
"The uptick in the private capex cycle, which weanticipate will begin in 2018, will ensure that the economyenters into a sustained and productive growth cycle," MorganStanley said in a research note, adding that over 2020-22, itexpects the economy to post an average GDP growth of 7.3 percent.
Moreover, the overall policy mix will also remainsupportive of a further improvement in productivity, whichwill help keep macro stability risks limited, it added.
The global brokerage expects recovery in private capitalspending in 2018 which will aid in overall economic recovery.
Moreover, corporate returns expectations and balancesheet fundamentals are also improving, and a strengtheningfinancial system will be able to meet investment creditdemand.
"This sets the stage for a fully fledged recovery in2018, and we expect real GDP growth to accelerate from 6.4 percent in 2017 to 7.5 per cent in 2018 and further to 7.7 percent in 2019," it said.
On prices, the report said the cyclical growth recoveryand normalising food prices are expected to drive a pick-up inheadline inflation.
"Against the backdrop of a better macro outlook, weexpect the RBI to hike in the second half of fiscal year2019," it added.
The Reserve Bank in its fifth bi-monthly review of thisfiscal kept the repo rate unchanged at 6 per cent and reverserepo at 5.75 per cent while raising the inflation forecast forthe remainder of 2017-18 to 4.3-4.7 per cent. PTI DRRABM.
This is unedited, unformatted feed from the Press Trust of India wire.