India to contribute 16% of global GDP: Morgan Stanley

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Chennai, May 16: With the Indian economy being a key contributor for Asian economic growth outperformance, the broad-based recovery in demand runs counter to the weakness seen outside Asia, said Morgan Stanley in a report.

According to Morgan Stanley, India is benefitting from a combination of cyclical and structural tailwinds and is expected to contribute 16 per cent of the global gross domestic product (GDP) over 2023-24.

"In recent months, a wide variety of indicators suggest that India's recovery is strong and broad-based, and is well-placed to sustain growth rates of above 6 per cent," the report said.

The Purchasing Manager's Index (PMI) is at a 13-year high and manufacturing PMI is near a 11-year high, both well above that of other economies; passenger vehicle sales are at 131 per cent of pre-Covid levels, real goods and services tax collections are 35 per cent higher than pre-Covid and services exports have risen by 84 per cent since Oct-20, Morgan Stanley said.

A strong domestic demand and services export will offset the downside in goods export. Domestic demand is supported by healthy balance sheets.

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