INDIA'S ECONOMIC BOOM FEELS LIKE 2003-07: MORGAN STANLEY

Says after decade of investment to GDP steadily declining, capex has emerged as a key growth driver

India's current world-beating economic growth rate on the back of an investment boom resembles that of 2003-07 when growth averaged more than 8 per cent, according to economists at Morgan Stanley.

In a report 'The Viewpoint: India - Why this feels like 2003-07', Morgan Stanley said after a decade of investment to GDP steadily declining, capex has emerged as a key growth driver in India. "We think the capex cycle has more room to run, therefore the current expansion closely resembles that of 2003-07.

The current cycle is driven by investment outperforming consumption, public capex leading initially but private capex rapidly catching up, the urban consumer leading consumption followed by catch-up in rural demand, market share in global exports rising and macro stability risks kept in check.