Morgan Stanley cut down Growth Forecast for India to 6.3 Per Cent

New York based global financial services firm Morgan Stanley on 21 May 2012 cut down India's economic growth forecast for financial year 2012-13 to 6.3 percent. The firm revised the India's 2012 economic growth forecast to 6.3 percent from prior 6.9 percent; 2013 forecast to 6.8 percent from earlier 7.5 percent.

On a financial year basis, Morgan Stanley pegged India’s growth in the fiscal year 2012-13 at 6.3 percent and 2013-14 at 6.9 percent.

The reduced growth projection owes to rising fiscal deficit and an expansionary policy of supporting consumption while private investment remains sluggish. Declining rupee and persistent inflation also combined to slow down the growth of Indian economy.

Morgan Stanley also expected RBI to reduce repo rate by an additional 100 basis points by March 2013, after 50 basis points which came into effect in April 2012.