Goldman Sachs forecasts that India’s economic growth could surpass 6% for the remainder of the decade.
According to Goldman Sachs Group Inc.’s India economist, India’s economic growth is expected to surpass 6% for the remaining years of the decade, potentially attracting increased investments from China into the South Asian nation.
Santanu Sengupta, speaking in an interview with Bloomberg Television’s Haslinda Amin on Friday, suggested that the long-term growth potential is progressively moving closer to 6.5%, or possibly slightly higher. He anticipated growth of 6.3% for the upcoming fiscal year starting in April, which is below the Reserve Bank of India’s projection of 7%.
He remarked that India’s demographics, robust government-driven expenditure, and thriving domestic demand position it as an “attractive destination for investments in the future.”
The potential growth rate represents the rate at which an economy can expand without leading to excessive inflation. Last month, the governor of India’s central bank estimated that the nation’s potential growth rate stood at approximately 7%.
Goldman Sachs anticipates that investment activity within India’s private sector will gain momentum following nationwide elections. According to them, businesses have significantly reduced their debt burden and their financial positions are among the strongest observed in India over the past two decades.
Here’s more from Sengupta:
He mentioned that the Reserve Bank of India is likely to delay adjusting its monetary policy until after observing movements from the Federal Reserve. He further elaborated that the RBI’s actions will unfold in three phases, starting with liquidity easing, followed by a shift in policy stance, and ultimately interest rate reductions.
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