India is likely to be the world’s fastest-growing large economy in the next 10 years, driven by digitisation, favourable demographics, globalisation and reforms, predicts a Morgan Stanley report.
According to the global financial services major, the trend line in India’s annual GDP growth has been accelerating to 6.9 per cent in 2000s, from 5.8 per cent in the 1990s, and this momentum is likely to continue in the next decade as well.
Morgan Stanley expects digitisation will provide a boost of 50-75 bps to GDP growth and forecast that India will grow to a USD 6-trillion economy and achieve upper-middle income status by 2026-27.
Moreover, gross FDI inflows are expected to amount to $ 120 billion by 2026-27, almost double the current 12-month trailing run rate of $ 64 billion.
Morgan Stanley said that India’s real GDP growth to compound annually at 7.1 percent and nominal GDP growth to compound at 11.2 percent, over the coming decade.
The report noted that the impact of higher GDP growth is expected to get reflected in corporate earnings momentum.