Morgan Stanley Cuts India's GDP Growth Forecast to 6.2% Amid West Asia Tensions Morgan Stanley has revised its forecast for India's GDP growth for the fiscal year 2026-27, lowering the projected growth rate from 6.5% to 6.2%. The adjustment comes in response to ongoing tensions in West Asia, which have led to volatility in global oil and gas prices. The firm attributes the downward revision to rising energy costs and potential disruptions in supply chains, which could weigh on India's economic performance. The updated forecast highlights concerns over the impact of higher oil prices, which are expected to average $95 per barrel during the fiscal year. Morgan Stanley also notes that gas supply constraints could pose an additional challenge, further complicating India's energy landscape. The report warns that elevated energy costs, combined with reduced industrial output in certain sectors, are likely to increase production expenses and dampen economic activity. Previously, Morgan Stanley had projected a 7.4% growth rate for the first quarter of 2026 and a 7% growth rate for the full fiscal year 2026-27. However, the latest analysis suggests that the economic environment is becoming more challenging. The firm warns that if Brent crude oil prices surge to $150 per barrel for a quarter, the impact on the Indian economy could be severe. In such a scenario, GDP growth for the fiscal year 2026-27 could decline to as low as 5.7%, while inflation might rise above 6%. The current account deficit could also widen to 3% of GDP, exacerbating macroeconomic pressures. Morgan Stanley's report underscores the growing uncertainty surrounding global energy markets, which are being influenced by geopolitical tensions in West Asia.#india #morgan_stanley #west_asia #moody_s #oecd
