<p>India could emerge as Asia's strongest economy in 2022-2023 as it is best-positioned to generate robust domestic demand, helped by economic policy reforms, a young workforce and business investments, Morgan Stanley economists said.</p>.<p>The brokerage expects India's growth to average 7 per cent for 2022-2023 and contribute 28 per cent and 22 per cent to Asian and global growth, respectively.</p>.<p>Morgan Stanley's projection comes as Asia's third-largest economy grew 9.2 per cent in the fiscal year 2022, a sharp recovery from a 6.6 per cent contraction in the previous year as Covid-19 lockdowns took a severe toll on its economy. The country now expects GDP growth for 2022-2023 at 8 per cent -8.5 per cent.</p>.<p>"Lower corporate taxes, the production-linked incentive (PLI) scheme and India as a potential beneficiary of supply chain diversification will catalyse and sustain domestic demand, especially in investment," the economists said in a note dated Tuesday.</p>.<p>In 2019, India had cut corporate tax rates to woo manufacturers and revive private investment, and launched the PLI scheme in 2020 to aid domestic manufacturing.</p>.<p>The brokerage sees risks related to higher energy prices, spurred by the Ukraine war and supply constraints, to remain, but added that they have begun to recede.</p>.<p>Morgan Stanley's outlook also comes as developed economies paint a glum picture, with business activity in the United States and eurozone contracting in July, as per their PMI data.</p>.<p>"The economy is set for its best run in over a decade as pent-up demand is being unleashed," the brokerage said, adding that "healthy" corporate balance sheets and business confidence bodes well for India's investment outlook.</p>.<p>While India, like other economies, raised interest rates to battle inflation, Morgan Stanley said the country's 39.45 trillion rupee ($529.7 billion) budget for the current fiscal year has continued to tilt towards lifting public investment.</p>.<p>It expects domestic consumption to pick up and services exports to hold up better than goods exports.</p>
<p>India could emerge as Asia's strongest economy in 2022-2023 as it is best-positioned to generate robust domestic demand, helped by economic policy reforms, a young workforce and business investments, Morgan Stanley economists said.</p>.<p>The brokerage expects India's growth to average 7 per cent for 2022-2023 and contribute 28 per cent and 22 per cent to Asian and global growth, respectively.</p>.<p>Morgan Stanley's projection comes as Asia's third-largest economy grew 9.2 per cent in the fiscal year 2022, a sharp recovery from a 6.6 per cent contraction in the previous year as Covid-19 lockdowns took a severe toll on its economy. The country now expects GDP growth for 2022-2023 at 8 per cent -8.5 per cent.</p>.<p>"Lower corporate taxes, the production-linked incentive (PLI) scheme and India as a potential beneficiary of supply chain diversification will catalyse and sustain domestic demand, especially in investment," the economists said in a note dated Tuesday.</p>.<p>In 2019, India had cut corporate tax rates to woo manufacturers and revive private investment, and launched the PLI scheme in 2020 to aid domestic manufacturing.</p>.<p>The brokerage sees risks related to higher energy prices, spurred by the Ukraine war and supply constraints, to remain, but added that they have begun to recede.</p>.<p>Morgan Stanley's outlook also comes as developed economies paint a glum picture, with business activity in the United States and eurozone contracting in July, as per their PMI data.</p>.<p>"The economy is set for its best run in over a decade as pent-up demand is being unleashed," the brokerage said, adding that "healthy" corporate balance sheets and business confidence bodes well for India's investment outlook.</p>.<p>While India, like other economies, raised interest rates to battle inflation, Morgan Stanley said the country's 39.45 trillion rupee ($529.7 billion) budget for the current fiscal year has continued to tilt towards lifting public investment.</p>.<p>It expects domestic consumption to pick up and services exports to hold up better than goods exports.</p>