India to become Asia’s strongest economy

Morgan Stanley economists have predicted that India could emerge as Asia's strongest economy in 2022-2023 as it is best-positioned to generate robust domestic demand, helped by economic policy reforms, a young workforce and business investments.
 
The brokerage expects India's growth to average 7% for 2022-2023 and contribute 28% and 22% to Asian and global growth, respectively.
 
Morgan Stanley's projection comes as Asia's third-largest economy, India, grew 9.2% in the fiscal year 2022, a sharp recovery from a 6.6% contraction in the previous year as Covid -19 lockdowns took a severe toll on its economy. The country now expects GDP growth for 2022-2023 at 8 to 8.5%.
 
In 2019, India had cut corporate tax rates to woo manufacturers and revive private investment, and launched the PLI scheme in 2020 to aid domestic manufacturing.
 
Morgan Stanley's outlook also comes as developed economies paint a gloomy picture, with business activity in the United States and eurozone contracting in July, as per their PMI data.
 
While India, like other economies, raised interest rates to battle inflation, Morgan Stanley said the country's $529.7 billion budget for the current fiscal year has continued to tilt towards lifting public investment. It expects domestic consumption to pick up and services exports to hold up better than goods exports.