News: Morgan Stanley raises Indian GDP forecast

(PTI 04/09/2006) New Delhi - Global investment banking and equity research major Morgan Stanley has raised its forecast for India’s economic growth in the current fiscal following stronger than expected surge in first-quarter corporate revenues, industrial production and automotive sales.

Morgan Stanley said it was raising its GDP growth forecast for the year ending March 2007 to 7.6 per cent from 6.8 per cent, notwithstanding the expectations for a slowdown in growth rate during the second half of this year.

Growth trend in the corporate revenue, industrial production and automobile sales indicates a rebound in the quarter ended June, Morgan Stanley’s India-based economists Chetan Ahya and Mihir Sheth said in a report.

Re-accelerated growth trends in the first quarter has prompted an upward revision to GDP growth forecasts for this fiscal, they said.

However, the analysts have cut down their growth forecast for the agriculture segment to 2 per cent from 3 per cent, primarily due to the erratic trend in the monsoon rainfall.