'India likely to see gradual growth recovery'

New Delhi, Dec 22: The Indian economy is expected to experience a gradual and sustaible recovery and post GDP growth of 7.5 percent this fiscal, American fincial services firm Morgan Stanley said in a report on Tuesday. “We expect a slightly slower pick-up in growth trajectory, given the trailing weakness from exterl demand and concerns about agriculture growth, with related impact on rural consumption,” Morgan Stanley said in a research note. “We expect GDP growth (new series, on market prices) to accelerate gradually to 7.5 percent in fincial year 2016 and 8.1 percent in fiscal year 2017,” it said. India is decidedly moving out of the macro-economic adjustment phase and into the recovery phase aided by government policy actions and the Reserve Bank of India’s (RBI) monetary policy response, the brokerage firm said. However, it would be a “longer-duration expansion cycle for India with low risks of overheating in the next two years, considering the overall policy approach of the government and RBI”, it added. The report said the upside and downside risks to the forecast will be influenced by two key factors - the pace of policy actions to revive productivity dymics and improve the growth mix, and the strength of exterl demand recovery and trend in capital inflows into emerging markets. (ians)