Indian economy may grow 6.7%

Morgan Stanley & Lehman Brothers Buildings, Canary Wharf, London. According to Morgan Stanley, Indian economy may grow 6.7% in current fiscal.

According to Chetan Ahya and Tanvee Gupta, economists at Morgan Stanley, “Higher capital flows have been the anchor of a self-fulfilling virtuous cycle of an appreciating exchange rate, lower interest rates, and strong domestic demand growth”. Further they said that however, capital inflows will remain slow for some more period due to continued risk aversion, resulting from slow global environment and rising credit defaults.

Morgan Stanley looks forward to credit growth to down to ten percent over about next half year compared with 4-year average of 28.3% as rising bad loans may make banks risk-averse.