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India would have the fastest economic expansion among Asian countries and its gross domestic product is expected to grow by 6.3 per cent in 2015, according to Morgan Stanley forecast of global economies.
The Indian rupee’s exchange rate to US dollar would be at Rs 62.20 by end of next year compared with Rs 62 in the current quarter (Q4 this year), according to a presentation made at the Morgan Stanley’s Annual Asia Pacific Summit held here from November 12-14.
It is seen at Rs 62.50 in the first two quarters of next year and Rs 62.30 in the third quarter of next year.
Fastest economic expansion
Comparative to other Asian GDP growths, India would have the fastest economic expansion, it said.
India’s gross domestic product is expected to grow by 6.3 per cent in 2015, up from 5.3 this year, it said.
“We are constructive on the INR from the outlook perspective,” Chetan Ahya, Morgan Stanley’s Chief Asia Economist, told PTI.
Strong capital inflows and the current account deficit under - 2 per cent would add upward pressure on the rupee.
Govt policy action
Reforms are providing confidence to India’s economic growth. The Indian Government’s policy action to improve business environment and lower oil prices are among the factors supporting the GDP growth, Ahya said.
Structural reforms related to land, labour and tax would support economic growth in the coming years. The risk would be any disruption to execution and delivery of reforms as well as a slowdown in exports, he pointed out.
Crude oil prices
On imports, the lower oil prices have been helpful and supporting the economic growth. Oil imports were down at 4 per cent of GDP now from 6 per cent in 2012.
“It is obviously helping the recovery process,” Ahya said.
Sub-par global growth
Meanwhile, Morgan Stanley has forecasted a sub-par global growth at 3.5 per cent in 2015, up nominally from 3.1 per cent this year. In Asia, China’s GDP is forecasted to contract to 7.1 per cent in 2015 from 7.3 per cent in 2014.
Asia's GDP, excluding Japan’s, would grow to 6.3 per cent in 2015, up by a small proportion from 6 per cent this year. Japan’s GDP growth would be stagnant at 0.8 per cent in 2014 and 2015.
Some 1,700 delegates, including representatives of 300 global corporations, are attending the summit.
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