Key Points
NEW DELHI: A weak coalition government in 2024 moving away from supply-side reforms could pose a key risk to India's growth stability along with oil prices inching up to $110 per barrel, said a Morgan Stanley report..
"The key risk would be the emergence of a weak coalition government, which could result into a pivot back towards redistributive policies at the expense of the focus on boosting capex and implementing supply-side reforms," it said.. Morgan Stanley researchers said India would be able to manage risks from oil prices increasing to $95 per barrel but cautioned that $110 per barrel could make the situation difficult for the country...
Crude oil price increased to $90.02 per barrel in October, according to government data..
"With macro stability indicators stretched under this scenario, we think currency depreciation pressures could rise and lead RBI to restart its rate hike cycle," said the report..
"The key imperative for India at the current stage of development is to focus on boosting private investment to reap the demographic dividend," it said, pointing out that "the investment cycle has already inflected, driven initially by a sharp upturn in public capex..
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