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Goldman Sachs raises India’s GDP growth forecast to 6.7% for 2024 ; expects RBI repo rate cut in December quarter

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NEW DELHI : Goldman Sachs has raised its GDP growth forecast on account of the bumper dividend by the Reserve Bank of India (RBI) and has also pushed back its expectations of interest rate cut by the central bank.Analysts at Goldman Sachs have revised upwards India’s GDP forecast by 10 basis points (bps) to 6.7% for 2024 as they expect sustained growth momentum with extra fiscal space on the back of massive dividend transfer by the RBI.

On domestic growth, high frequency indicators remain strong, with our proprietary consumption index tracking a recovery in Q1 (+7.8% YoY) underpinned by a nascent recovery in rural consumption and a sustained momentum in urban consumption indicators.

“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 CY24 slightly higher by 10 bps to 6.7% YoY,” Goldman Sachs analysts Santanu Sengupta, Arjun Varma and Andrew Tilton said in a note.

India’s growth momentum remains strong and they expect the core inflation will bottom out in April-June 2024 and be around 4.0% – 4.5% in H2CY24.

Meanwhile, the Monetary Policy Committee (MPC) members from the RBI have sounded cautious on sticky food inflation owing to supply side disruptions due to the ongoing hot weather conditions in many parts of India.


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