NEW DELHI — Leading global financial firm Goldman Sachs has revised its forecast for India’s GDP growth by 10 basis points to 6.7 per cent as it expects the government’s heavy investments in big-ticket infrastructure projects to continue with the huge dividend coming in from the RBI.
“Going forward, we expect investment growth momentum to sustain with extra fiscal space for infrastructure spending given a higher than expected dividend transfer by the RBI. As a result, we recently revised our growth forecasts for 2024 slightly higher by 10 bps to 6.7 per cent,” Andrew Tilton, head of emerging markets economic research at Goldman Sachs said in a note.
“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 per cent in July-December,” the financial company said.
However, the RBI’s monetary policy committee members have recently sounded cautious on sticky food inflation and may want to see monsoons progress and the summer crop sowing to assess the food inflation outlook in July-December, before pivoting towards monetary policy easing, the report said.
“Taking into account these developments, we push our RBI rate cut call back by one quarter to October-December, with the first cut most likely in the December 2024 meeting,” the report added.
The report also came on a day when the IMD confirmed its forecast of above-average monsoon rains this year which are expected to spur production in the agricultural sector that was hit by erratic weather last year.
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