Sachs Predicts India’s GDP Growth To Soar At 6.7%

The renowned US-based financial institution Goldman Sachs, known to be a global investment bank, has revised its GDP forecast for India by 10 basis points to 6.7% for 2024. This revision is based on sustained growth momentum and the expectation of extra fiscal space due to a dividend transfer from RBI to the government. 

The global financial institution Goldman Sachs also predicts RBI will go for an interest rate cut between October and December. It’s because of the boost in core goods inflation due to a rise in manufacturing costs. High-frequency indicators (indicators that are reported monthly or weekly and provide a timely view of economic conditions) remain strong, with the proprietary consumption index tracking a revocably in Q1 (+7.8%YoY) on domestic growth.

Andrew Tilton, the head of emerging markets economic research at Goldman Sachs, co-wrote a note with Santanu Sengupta and Arjun Varma. In this note, he said, “ Going forward, we expect investment growth momentum to sustain with extra fiscal space for infrastructure spending, giving a higher than expected dividend transfer by the RBI. As a result, we recently revised our growth forecasts for 2024 slightly higher by 20 bps to 6.7%.” 

Goldman Sachs says, “ In India, growth momentum remains strong, and while we think core inflation will bottom out in April-June, we expect it to be around 4.0-4.5% in July-December.”

Meanwhile, the RBI MPC (Monetary Policy Committee) members rang an alert on sticky food inflation owing to supply-side disruptions caused by constant weather conditions in Indian territory. 

According to the prediction by Goldman Sachs, India is likely to witness a jump in its GDP growth rate. The International Money Fund (IMF) has also raised India’s GDP growth projection to 6.8%. Earlier, it was forecasted that India’s GDP growth would reach 6.5%.

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