Morgan Stanley cuts India's FY12 growth forecast to 6.3%

Slowing private investment and high deficit makes dent in growth prospects

Morgan Stanley has cut India's economic growth forecast for the calendar year 2012 to 6.3% from 6.9% earlier and has pegged the forecast for calendar 2013 at 6.8% (earlier 7.5%).

On a financial year basis, Morgan Stanley expects growth at 6.3% for 2012-13 and at 6.9% for 2013-14.

'Bad' growth mix — a combination of high national deficit and an expansionary policy of supporting consumption while private investment slows — has reached its limits, Morgan Stanley says.

It expects RBI to lower repo rate by an additional 100 bps by March 2013, after 50 bps cut effected in April.