Asia to clock higher growth than the US in FY23, says Chetan Ahya of Morgan Stanley

Chetan Ahya, Chief Asia Economist at Morgan Stanley (Image: Morgan Stanley)

Morgan Stanley is bullish on Asian countries and expects them to clock a higher growth than the United States in FY2023.

Chetan Ahya, Chief Asia Economist, Morgan Stanley, told CNBC-TV18, that he believed Asia would outperform the US in the current financial year on the back of domestic demand, as he also discussed India's inflation dynamics and export outlook.

“The key premise for our constructive view on growth outlook is that we think inflation will decline rapidly towards the central bank's comfort zone,” Ahya told the channel on the sidelines of the 21st Asia Pacific Investors’ Conference on November 16.

“That means that the central banks will not have to take rates into restrictive territory, supporting domestic demand and that domestic demand strength we think will allow Asia to outperform US growth.”

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Ahya expects Asia's GDP to grow from the present 3.5 percent to 4.6 percent in the second half of the next year.

“At the same time, we are expecting the US growth to remain weak at around 0.5 percent. So that means that the differential between Asia and US growth will continue to widen and that will make Asia look very attractive from a growth perspective,” he added.

Talking about India, Ahya said the global slowdown and weak exports were the key reasons Moragn Stanley have kept GDP growth at 6.2 percent for the next year. “But then in FY 2025, we are still expecting a pretty reasonable growth of 6.50 percent,” he added.

Watch the full interview here