India will return to pre-COVID-19 levels by Q1 of FY22, says Morgan Stanley

India’s Gross Domestic Product (GDP) growth will return to pre-COVID-19 levels by Q1 of FY22, Chetan Ahya, Managing Director and the Asia Pacific Economist, Morgan Stanley said in an interview with CNBCTV18.

Chetan discussed the probability of India returning to pre-COVID-19 standard by Q1 FY22 and according to him it may contract by 5.7 percent in 2020 and rebound to 9.8 percent in 2021.


“That’s the time when the central bank should begin to think about taking back some of the extraordinary support that they are providing to the economy,” he pointed out.

On the account of global inflation, he remarked, “We are highlighting that there will be an inflation upside in developed markets, especially in the US, but in 2021 it will still be moderate inflationary pressures, not aggressive enough that the policymakers begin to tighten aggressively and slow down the growth.”

“RBI may look to unwind some monetary stimulus,” Chetan Ahya emphasised.

“There is no need for additional accommodation in monetary policy. The pullback should be done by RBI now,” Ahya concluded.

According to him emerging markets will see a good run for the coming two years.