India's economy to grow above 6% this decade: Goldman Sachs
Goldman Sachs's India economist, Santanu Sengupta, predicts that India's economic growth could surpass 6% for the remainder of the decade. The country will divert more investments from China and the long-term growth potential is likely "inching higher toward 6.5% or slightly higher." He also estimated a 6.3% growth rate for the upcoming fiscal year starting in April, which is lower than the Reserve Bank of India's (RBI) 7% projection.
Private sector to boost investments after General Elections
Sengupta believes India's growth potential is due to its demographics, robust government-led spending, and solid domestic demand, making it an attractive destination for future investments. He also anticipates the private sector in India to boost investments after the General Elections. Sengupta stated that businesses have aggressively deleveraged, and their balance sheets are among the "cleanest that we have seen India in the last 20 years or so."
Goldman Sachs expects two rate cuts in India in 2024
According to Sengupta, the RBI will likely wait for the Federal Reserve's move before adjusting its monetary policy. He explained that the RBI's actions would occur in three phases: easing liquidity, a change in policy stance, and interest rate cuts. Goldman Sachs expects two rate cuts in India during the second half of the year. However, Sengupta cautioned that if the economy underperforms, the RBI might need to cut interest rates more urgently and aggressively.
