MS: India’s growth may dip by 60 bps on Brexit

Mumbai: Brexit is likely to have an adverse impact on India’s growth with domestic GDP expected to decline by up to 60 basis points in a high-stress scenario within the next two years, Morgan Stanley said. According to the global financial services major, the impact on Indian economy would be through trade and financial channels. However, it noted that owing to lower direct exposure in terms of exports to the UK, the Brexit impact would be “less” as compared to other more open economies in the region. In terms of policy response, Morgan Stanley expects monetary policy to be more focused on mitigating liquidity tightness through open market operations (purchase of government securities) in the eventuality of capital outflows.