Synopsis: Global investment bank Goldman Sachs has raised its forecast for India's GDP growth to 6.7% for 2024, citing strong economic indicators and sustained investment momentum. This adjustment follows similar upward revisions by agencies like the IMF, which now projects India's growth at 6.8%.
Global investment bank Goldman Sachs has revised India's GDP growth forecast for 2024 to 6.7%, citing strong indicators that suggest sustained growth momentum.
However, the bank has delayed its prediction for the Reserve Bank of India's interest rate adjustments by a quarter.
Goldman Sachs stated in a note that they expect investment growth momentum to persist, supported by additional fiscal space for infrastructure spending due to a higher-than-expected dividend transfer from the RBI.
Following a remarkable expansion in the October-December quarter of 2023-24, several multilateral agencies, including the International Monetary Fund (IMF), have also raised India's GDP growth projections.
The IMF now estimates India's GDP growth at 6.8%, up from the previous 6.5% estimate. The Reserve Bank of India (RBI) anticipates the economy to grow by 7% in the current fiscal year.
The report further indicated that the RBI is expected to cut interest rates in the fourth quarter of 2024, with the first cut likely in December 2024.
"We continue to expect a shallow easing cycle with a total of 50 basis points in rate cuts," the report added.
In conclusion, Goldman Sachs has increased its forecast for India's GDP growth to 6.7% for 2024, driven by robust economic indicators and anticipated sustained investment momentum.
This positive outlook aligns with revised projections from other agencies like the IMF, which now estimates a growth rate of 6.8%.
Despite this optimistic economic forecast, Goldman Sachs has postponed its expectations for the Reserve Bank of India's interest rate cuts to the fourth quarter of 2024, predicting a gradual easing with a total reduction of 50 basis points.
Related Questions
1. What is Goldman Sachs' revised GDP growth forecast for India in 2024?
Goldman Sachs has revised India's GDP growth forecast for 2024 to 6.7%, citing strong indicators that suggest sustained growth momentum.
2. What is the new expectation for the Reserve Bank of India's interest rate adjustments according to Goldman Sachs?
Goldman Sachs has delayed its prediction for the Reserve Bank of India's interest rate cuts to the fourth quarter of 2024, with the first cut likely in December 2024, and expects a total of 50 basis points in rate cuts.
3. What factors are supporting the expected investment growth momentum in India?
Goldman Sachs cited additional fiscal space for infrastructure spending due to a higher-than-expected dividend transfer from the RBI as a factor supporting the expected investment growth momentum in India.
4. How have other agencies, like the IMF, revised their GDP growth projections for India?
The International Monetary Fund (IMF) has raised India's GDP growth projection to 6.8%, up from the previous estimate of 6.5%.
5. What is the RBI's current GDP growth expectation for India in the fiscal year 2023-24?
The Reserve Bank of India (RBI) anticipates the economy to grow by 7% in the fiscal year 2023-24.
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