MS2012印度经济全球资金环境如何影响印度增长率Indiaeconomics.pdf

M O R G A N S T A N L E Y R E S E A R C H A S I A / P A C I F I C Morgan Stanley Asia Limited Chetan Ahya Chetan.Ahya@ +852 2239 7812 Morgan Stanley India Company Upasana Chachra Private Limited Upasana.Chachra@ +91 22 6118 2246 February 7, 2012 India Economics How Global Funding Environment Influences India’s Growth Trend? India’s growth outlook affected by two key macro factors: We have been highlighting that two key macro factors will affect India’s growth outlook: (a) global funding environment and its impact on capital inflows into India; (b) domestic challenges. In this note, we are reiterating our framework on how and why global funding environment influences India’s growth trend. Capital inflows – A critical macro link: First, India relies on capital flows to fund its current account deficit. Second, FX outflows or inflows heavily influence domestic liquidity conditions. With current account in deficit, even a slowdown in capital inflows results in net foreign exchange outflows. Third, commercial sector funding tends to be highly dependent on foreign capital flows. Bottom-line: The recent policy action in the developed world has stabilized the funding environment and significantly reduced the tail risks. The reduction of the