New Delhi: India is poised to be the fastest growing economy in the world, Morgan Stanley stated. The latest prediction was published in the global financial services’ report of the Global Investment Committee (GIC). The GIC is a group of specialised and seasoned investment professionals from Morgan Stanley & Co. who give their analysis on the global economy and financial markets.
The report predicts real GDP growth of India at 6.4 percent for the fiscal year 2026 (FY26). “India remains the fastest-growing economy in our coverage, with real GDP growth at 5.9 percent, Q4/Q4 in 2025, and 6.4 percent in 2026,” said the latest report.
When it comes to the global growth outlook, the report predicts a significant slow down in global economic growth. Global GDP growth is expected to decline to 2.5 percent in FY26 from 3.5 percent in the previous fiscal year, FY24.
The report stated that a trade shock is expected to hit several economies while simultaneously pushing them below their potential growth levels. The report said, “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.”
Morgan Stanley predicts real GDP growth prospects of the USA to be just 1 percent in the current fiscal year, FY26. For the Eurozone, it predicted the GDP growth forecast to be below 1 percent due to the sluggish private consumption and lesser exports in the wake of tariffs.
On the Chinese front, the economy is predicted to slow down courtesy of US President Trump’s tariffs and the ongoing trade war between the two biggest economies. The Chinese economy is predicted to grow at 4.2 percent in the current fiscal year, FY26, up from the 4 percent in its previous fiscal year, FY25.
The report observes positive momentum across Asia Pacific and emerging markets through mid-2026. The investment firm maintains an overweight stance on the India, Singapore, and UAE (United Arab Emirates) courtesy of the positive growth prospects of these economies.