The bank cited the possibility of fiscal tightening, reduced confidence and the sovereign debt crisis in Europe as reasons for the movement, Bloomberg reports.
According to the lender, growth of 3.9 per cent is now anticipated across the year - a figure markedly down from the 4.2 per cent previously claimed.
Chetan Ahya, an analyst from Morgan Stanley - which has been advising companies, governments and investors across the globe since 1935 - noted a number of reasons are weighing down on the financial markets at present, including "recent policy errors, especially Europe's slow and insufficient response to the sovereign crisis and the drama around lifting the US debt ceiling".
The industry expert observed such action has also served to chip way at both business and consumer confidence, adding Europe and the US are dangerously close to sliding into recession.
By Tony Aynsley