Goldman Sachs cuts India's growth forecast by 20 basis points
Mumbai: Goldman Sachs Group Inc. has slashed India's growth forecast for this year and the next by 20 basis points, citing a reduction in central government spending, Bloomberg reported.
After the revision, the bank anticipates the Indian economy to grow by 6.7% in 2024 and 6.4% in 2025.
The downgrade for this year reflects a 35% year-on-year drop in government spending during the April-June quarter, which coincided with the general election, according to a report by the bank’s economists led by Santanu Sengupta.
Next year’s growth is expected to be constrained by the government's budget commitment to reduce the fiscal deficit to below 4.5% of GDP.
Growth will face challenges from slower real consumption, driven by a deceleration in household credit as the Reserve Bank of India enforces stricter regulations on unsecured lending by banks.
However, Goldman Sachs said that a more accommodative monetary policy might help mitigate some of the impact on real GDP growth, with expectations that the RBI will begin easing its monetary policy in December 2024.
IBNS
Senior Staff Reporter at Northeast Herald, covering news from Tripura and Northeast India.
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