New Delhi [India], March 11 : Despite ongoing global trade tensions India is the best-positioned country in Asia for economic growth, according to a report by Morgan Stanley.
The report, titled highlighted that India's strong services exports, low dependence on goods exports, and supportive government policies will help it outperform other economies in the region.
It said, "Trade tensions will likely remain a drag on Asia's growth outlook. We highlight the reasons why India is still the best placed in the region against this backdrop - low goods exports, strong services exports and policy support for domestic demand.
The report noted that trade tensions will continue to impact Asia's overall growth outlook. However, India is in a better position due to its low goods exports as a percentage of GDP, making it less vulnerable to disruptions in global trade.
At the same time, India's services exports remain strong and are expected to grow further, providing stability amid global uncertainties.
Morgan Stanley also highlighted the importance of government policies in boosting domestic demand. With supportive measures in place, India is expected to see a turnaround in consumption and investment, which will drive its growth momentum.
The report argued that the previous phase of strict fiscal and monetary policies had slowed down economic activity. However, with the reversal of these policies, India is now on the path to recovery.
The easing of monetary policy is playing a crucial role in this recovery. The Reserve Bank of India (RBI) has taken multiple steps, including lowering interest rates, injecting liquidity into the financial system, and relaxing regulatory norms.
The report stated that these measures are expected to boost lending, encourage investment, and support overall economic activity.
Even if the global economy slows down further, India is likely to remain a strong performer in the region. The report highlighted that India's economy is less dependent on goods exports and has a resilient services sector, which will help it withstand global economic challenges.
While there are some risks from trade tensions, Morgan Stanley believes India's strong domestic demand and supportive policy environment will help it take the lead in Asia's growth story.
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