India is set to remain the fastest-growing economy among all countries covered by Morgan Stanley, the global investment firm said in its latest Global Investment Committee (GIC) report.
As per a report, the recent findings from Morgan Stanley forecast India’s real GDP to grow by 5.9 per cent in 2025 and 6.4 per cent in 2026, based on quarter-on-quarter growth.
“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 GIC noted in its outlook.
Morgan Stanley expects global economy to slow down
While India’s economy is set to expand rapidly, the global economy is expected to slow down. According to ANI, the report by Morgan Stanley estimates that global real GDP growth will drop from 3.5 per cent in 2024 to 2.5 per cent in 2025.
Morgan Stanley attributed this decline to a possible trade shock that could hit several countries at once, dragging them below their potential growth levels.
“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 report stated.
Growth outlook for US, China, and Europe
In the United States, growth is likely to fall from 2.5 per cent in 2024 to just 1 per cent in 2025 and 2026, ANI reported citing the Morgan Stanley report.
The Eurozone is also expected to see weak growth, staying below 1 per cent annually due to sluggish private consumption and exports.
China’s growth is projected to slow down to 4.0 per cent in 2025 and 4.2 per cent in 2026, with tariffs dragging growth by about 0.5 percentage points and deflation concerns still present.
Mixed trends across Asia and emerging markets
Despite global challenges, Morgan Stanley sees some positive momentum in the Asia Pacific region and emerging markets up to mid-2026.
According to ANI, the report maintains an overweight view on India, Singapore, and the UAE, citing strong domestic growth trends and reform-driven momentum in these economies.
Indian equities remain strong
According to ANI, Morgan Stanley also highlighted that Indian equities, though considered expensive by historical standards, continue to receive strong support from robust domestic retail and institutional investment flows.
The report was prepared by Morgan Stanley’s Global Investment Committee, a team of experts from its wealth management and investment divisions who closely monitor financial market trends and global economic developments.