Chetan Ahya, Chief Asia Economist at Morgan Stanley, is super bullish about the Indian economy. Speaking to CNBC-TV18 on Wednesday, May 17, Ahya said India is going to get the attention from a lot of multinationals as a base for not only manufacturing but also for the market. His comments come a day after Morgan Stanley, in a report, said India is expected to contribute 16 percent of the global gross domestic product (GDP) growth over 2023-24.
The Morgan Stanley economist said India's manufacturing PMI (purchasing managers’ index) is at 57.2, while the global manufacturing PMI, excluding India, is in a contraction mode. Similarly, India's services PMI is at 62 and rest of the world has not seen that much strength in the services sector, he noted.
"In comparison to India's own history, the services PMI is at a 13-year high, and manufacturing PMI is close to 11-year highs," the economist said, adding that both these numbers are a clear standout for India.
Further, he noted that with strong consumption and investment, India's story is quite unique at a time when there is a global problem for growth across regions and economies.
Ahya also said he is confident about the 6.2 percent GDP estimate for India. Earlier, in a report, Morgan Stanley said the full reopening of the economy last year, cyclical recovery in consumption, increased private sector capex, and acceleration on government spending will contribute to 6.2 percent growth in India's GDP in FY24.
On India's goods exports
On India's goods exports, which shrank 12.7 percent year-on-year to $34.66 billion in the first month of FY24, dragged by sluggish demand and recession in major markets, Ahya said, "We don't expect exports to turn up quite aggressively, but it looks like the worst of goods export weakness is behind us."
Explaining further, he said the services export growth in India is also driven by a gain in market share, so it's not just that the global services sector is doing well. Goods export will decline due to a global slowdown, he said.
India's trade deficit fell to a 20-month low at $15.2 billion in April against $18.36 billion a year ago as cooling commodity prices, especially petroleum, led to a sharp 14 percent.
This is the fourth month of decline in goods imports and third consecutive fall in monthly exports.
