Wednesday, October 20, 2021

Morgan Stanley sees capex to GDP ratio rising 6 % from FY21 to FY26.


India on cusp of virtuous cycle as capex-GDP ratio set to rise: Morgan Stanley

Capex and productivity growth are likely to be key drivers of growth in India as Morgan Stanley sees capex to gross domestic product (GDP) ratio rising 6 percentage points (ppt) from FY21 to FY26. Increasing capex ratios will lift employment prospects and boost income and consumption growth, creating a virtuous cycle, it said.

“A virtuous cycle, supported by strong capex and productivity, is taking off in India. Strong rates of growth, coupled with benign macro stability risks, set a positive backdrop for the ratio of corporate profits to GDP to rise. This cycle will be unlike the past decade and more like 2003-07," Morgan Stanley said in a note on 19 October.


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