
India will likely maintain its position as the fastest-growing economy among nations tracked by global investment giant Morgan Stanley, according to the firm’s latest Global Investment Committee (GIC) report.
The analysis anticipates India’s real GDP to grow by 5.9 per cent on a quarter-four-over-quarter-four basis in 2025, rising to 6.4 per cent in 2026.
The report noted, “India remains the fastest growing economy in our coverage, with real GDP growth at 5.9 per cent, Q4/Q4 in 2025 and 6.4 per cent in 2026.”
The Global Investment Committee comprises seasoned professionals from Morgan Stanley & Co and Morgan Stanley Wealth Management.
The team convenes regularly to evaluate trends shaping the global economy and financial markets.
According to the committee’s base-case scenario, global economic momentum is to weaken sharply.
The report projects a slowdown in global real GDP growth from 3.5 per cent in 2024 to 2.5 per cent in 2025.
It highlights that a broad-based trade shock is likely to impact numerous economies simultaneously, dragging growth below their potential.
“We anticipate global growth stepping down by a percentage point in 2025 from 2024, with US trade policy and the uncertainty it engenders serving as the main drivers,” the committee stated.
Regional growth projections
In the United States, growth will likely decelerate from 2.5 per cent in 2024 to just 1.0 per cent in both 2025 and 2026.
A similar trend is likely in the eurozone, where weak consumer spending and exports are to keep growth below 1 per cent annually during the same period.
China’s economy is also forecast to lose pace, with tariffs anticipated to reduce growth by around 0.5 percentage points in 2025 compared to 2024.
The report estimates China’s real GDP growth at 4.0 per cent in 2025 and 4.2 per cent in 2026, with deflation pressures persisting.
In Japan, while the trade slowdown may weigh on exports, consumer spending is likely to support continued nominal GDP growth.
Despite these headwinds, the report sees signs of resilience across Asia Pacific and emerging markets through to mid-2026. It maintains a favourable view on India, Singapore, and the United Arab Emirates (UAE), supported by robust domestic growth and reform momentum.
On Indian equities, the report acknowledges their premium valuations relative to historical levels but points to sustained retail and institutional investor interest as a key factor underpinning market strength.
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