Goldman Sachs has revised its forecast for India’s GDP growth in 2024, increasing it by 10 basis points to 6.7%, citing sustained government investments in infrastructure projects and a substantial dividend from the Reserve Bank of India (RBI).
Andrew Tilton, head of emerging markets economic research at Goldman Sachs, noted in a report that the investment growth momentum in India is expected to continue, bolstered by additional fiscal space for infrastructure spending due to a higher-than-anticipated dividend transfer by the RBI.
"As a result, we recently revised our growth forecasts for 2024 slightly higher by 10 bps to 6.7 percent," Tilton said.
Goldman Sachs also highlighted that India's growth momentum remains robust.
While core inflation is expected to bottom out in the April-June period, it is projected to be around 4.0% to 4.5% in the second half of the year.
However, members of the RBI’s monetary policy committee have expressed caution regarding persistent food inflation.
They are likely to monitor the monsoon's progress and summer crop sowing before considering easing monetary policy, the report stated.
“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 coincided with the Indian Meteorological Department's confirmation of its forecast for above-average monsoon rains this year, which is expected to boost agricultural production following last year's erratic weather conditions.
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