New York: American multinational investment bank and financial services company, Goldman Sachs, has reduced India’s GDP growth forecast for 2025. The rating agency predicted GDP growth to decelerate to 6.3% YoY in CY25.
‘Though India’s strong long-term structural growth story remains intact, we forecast GDP growth to decelerate to 6.3% YoY in CY25, on continued fiscal consolidation and slower credit growth on macro-prudential tightening by the RBI,’said Goldman Sachs.
‘While the cyclical growth slowdown calls for easier monetary conditions in our view, the ‘stronger dollar’ scenario will mean the RBI will likely proceed cautiously. Given macro-prudential tightness, retail loan growth may remain tepid even in the face of lower rates,’ said Santanu Sengupta, Chief India economist at Goldman Sachs and his team in a report.
Also Read: Jharkhand Assembly Election 2024: India bloc to retain power
Goldman Sachs forecast headline inflation at 4.2% YoY in CY25, with food inflation at 4.6% YoY. Core inflation should be around the RBI’s target of 4% YoY in CY25. Goldman Sachs forecast India’s current account deficit (CAD) at 1.3% of GDP in CY25.
Earlier India based rating agency ICRA said that India’s real GDP growth for the September quarter is likely to decline to 6.5 per cent due to heavy rains and weaker corporate performance. he agency, however, maintained its FY25 growth estimate at 7 per cent.
Meanwhile, international rating agency, Moody’s Ratings forecasts a 7.2 per cent GDP growth for India in 2024. It also predicted a growth rate of 6.6% in 2025 and 6.5% in 2026.
India’s real GDP expanded 6.7 per cent year-over-year in the second quarter of 2024. RBI has projected a GDP growth rate of 7.2%, while government expects it to grow in the range of 6.5%-7%.
Post Your Comments