2025-03-14
3 分钟Welcome to Thoughts on the Market, I am Chetanaya, Morgan Stanley's Chief Asia Economist.
Today I will be taking a look at Indian economy amidst escalating trade tensions in Asia and around the globe.
It is Thursday, March 13, at 2pm in Hong Kong.
Over the last few months, investors have been skeptical about India's growth narrative.
Investors like us have been caught off guard by the surprising recent slowdown in India's growth.
With the benefit of hindsight,
we can clearly attribute the slowdown to an unexpected double tightening of fiscal and monetary policy.
But India seems to be on its way to recovery.
Greenshoots are already emerging in recent data,
and we believe the recovery will continue to firm up over the coming months.
What makes us so confident in our outlook for India?
We see several key factors behind this trend.
First, fiscal policy is turning supportive for growth again.
The government has been ramping up capital expenditure for infrastructure projects like roads and railways,
with growth accelerating markedly in the recent months.
They have also cut income tax for households, which will be effective from April 2025.
Second, monetary policy is easing across rates, liquidity and the regulatory front.
With CPI inflation recently printing at just 3.6%, which is below target,
we believe the central bank will continue to pursue easy monetary policy.
And third, moderation in food inflation will mean real household incomes will be lifted.