While decreasing its growth prediction, Goldman Sachs Group Inc. anticipates India’s economic growth slowing next year, citing a hit to consumer spending from increased borrowing prices and fading advantages from the pandemic reopening as reasons. According to Goldman, GDP could grow by 5.9% in the calendar year 2023, up from an estimated 6.9% this year.

“Growth will almost certainly be divided into two parts, with a slower first half as the reopening boost fades and monetary tightening drags on domestic consumption.” “GDP is projected to re-accelerate in the second half as global growth improves, the drag from net exports reduces, and the investment cycle picks up,” the note said. Goldman expects the investment cycle to take up in the second half of 2023, assisting India’s recovery.


The Reserve Bank of India is expected to hike the benchmark interest rate by 50 basis points in December and another 35 basis points in February, reaching a terminal rate of 6.75%, according to Goldman economists. The benchmark rate is presently 5.9%.

Moody’s Investors Service cut India’s economic growth forecast for 2022 from 7.7% to 7%, citing monetary policy tightening, increased inflation, uneven monsoon distribution, and declining global development. It anticipates that RBI will raise the repo rate by another 50 basis points to underpin inflation expectations. It will also support the rupee.

Annual top story In September, CPI inflation increased to 7.5%, up from less than 7.0% in July. Wholesale price inflation, on the other hand, has been falling for four months in a row. It falls from a high of 16.6% in May to 10.7% in September.

Moody forecast

Moody’s also decreased its 2023 growth forecast to 4.8% from 5.2% previously. Following the slowdown, the agency anticipates that India’s economic growth would resume at 6.4% in 2024. However, the rating agency stated that India’s underlying growth fundamentals are fundamentally strong, bolstered by a recovery in services activity.

In contrast, the World Bank reduced its 2022-23 (FY23) real GDP growth forecast for India to 6.5%, down from 7.5% previously, while warning that spillovers from Russia’s invasion of Ukraine and global monetary tightening will weigh on the economy.

India’s exports fell for the first time since the pandemic, and the previous time they fell was in February 2021. Furthermore, trade data reveal that the Indian economy is vulnerable to global demand sentiment. And as a result, India’s GDP rate may suffer as well.

Furthermore, the firm anticipates that headline retail inflation would fall to 6.1% next year, down from 6.8% this year. According to experts, inflation has been above the RBI’s tolerance band of 6% for the past ten months. It is anticipated to remain above that level in the coming months.

Post-Covid-19, economies lost growth momentum as central banks continued to aggressively boost rates in an attempt to contain spiraling inflation. The rate hikes are projected to stifle advanced nations’ growth momentum, raising the dangers and concerns of a worldwide recession. Experts predict that the GDPs of wealthy economies will also suffer.

About Goldman Sachs

Goldman Sachs is a multinational investment bank and financial services firm based in the United States. It was founded in 1869 and is headquartered in Lower Manhattan at 200 West Street, with regional headquarters in London, Warsaw, Bangalore, Hong Kong, Tokyo, Dallas, and Salt Lake City, as well as additional offices in other international financial cities.

Goldman Sachs is the world’s second-largest investment bank by revenue, and it ranks 57th on the Fortune 500 list of the largest firms in the United States by total revenue. The Financial Stability Board regards it as a systemically important financial institution.

Also Read : Mangaluru blast accused was inspired by ISIS, explosives recovered from home

 222 total views,  1 views today