Morgan Stanley raised U.S. economic growth forecast for the year on a strong industrial sector and more public investment in infrastructure, and expects a "comfortable" soft-landing for the economy.

Economists at Morgan Stanley now expect U.S. real gross domestic product (GDP) to grow 1.3% on average in 2023, from an earlier forecast of a 0.6% rise.

"Incoming data now point to a more comfortable soft landing than we had anticipated, led by public investment in infrastructure and nonresidential structures investment," Morgan Stanley economist Ellen Zentner wrote in a note dated Thursday.

The bank sees investment in non-residential structures growing 12.9% by the fourth quarter, and state and local investments by 4%.

The case for the U.S. economy making a soft-landing - a slowdown in economic growth that avoids a recession - has been rising, with Goldman Sachs earlier this week cutting the probability of a U.S. recession in the next 12 months to 20% from and earlier forecast of 25%.

(Reporting by Roshan Abraham and Susan Mathew in Bengaluru; Editing by Krishna Chandra Eluri)