NEW DELHI: The election results could be an “inflexion point” for India’s story and the country’s GDP is likely to accelerate to 6.8 per cent over the next two years, a Morgan Stanley report says.
Inflation, on other hand, is expected to head towards 6 per cent, it added.
“We now feel more confident that India will emerge from the stagflation type of environment over the next few quarters,” Morgan Stanley said.
“The GDP growth is to accelerate by 210bps over the next 8 quarters to 6.8 per cent. Inflation will finally head towards RBI’s comfort zone of 6% over the next two years,” it said in a research note.
While India’s structural story has been very strong, the pace of reforms has been slow in the recent years holding back its growth.
Reforms that could follow post elections will improve the business sentiment, thereby lifting corporate sector profitability and incentivising a revival in private investment, experts believe.