Daijiworld Media Network- New Delhi
New Delhi, Jul 1: In a major boost to India’s economic outlook, global investment giant Morgan Stanley has projected India to remain the fastest-growing major economy through 2025 and 2026, even as global growth is expected to witness a considerable slowdown.
According to the latest report released by Morgan Stanley’s Global Investment Committee (GIC), India’s real GDP is forecast to grow by 5.9% in 2025 and 6.4% in 2026 on a Q4-over-Q4 basis. The committee — comprising top investment strategists from Morgan Stanley & Co. and Morgan Stanley Wealth Management — meets regularly to assess trends shaping the global economy and financial markets.
“India remains the fastest-growing economy in our coverage,” the report stated, signaling confidence in India’s economic resilience and growth momentum despite global headwinds.
In contrast, global economic growth is projected to fall sharply, dropping from 3.5% in 2024 to just 2.5% in 2025. The report attributes the decline primarily to emerging trade shocks and rising policy uncertainties, particularly in the United States.
The US is expected to see its real GDP growth decline from 2.5% in 2024 to just 1% in 2025 and 2026, while the eurozone is projected to register sub-1% growth throughout the same period, weighed down by weak consumption and sluggish exports.
China’s economic outlook also remains under pressure, with Morgan Stanley forecasting a slowdown to 4.0% growth in 2025 and 4.2% in 2026, largely due to tariff impacts and ongoing deflationary concerns. Japan, too, is expected to feel the heat of a global trade shock, though steady domestic consumer spending could cushion the blow.
Despite the subdued global picture, Morgan Stanley maintains a bullish stance on the Asia-Pacific and select emerging markets, including India, Singapore, and the UAE. The report highlights that India stands out due to ongoing structural reforms, strong domestic demand, and robust capital inflows from both retail and institutional investors.
While the report acknowledges that Indian equity markets are trading at higher valuations compared to historical averages, it notes that the liquidity from domestic investors is expected to sustain these levels, reflecting investor confidence in the country's long-term growth trajectory.
As the global economy braces for turbulence, India’s economic resilience, reform-driven growth, and consumption-led momentum have placed it firmly on the path to sustained expansion — a beacon of optimism in an otherwise slowing world.