Anticipating a robust economic outlook for India, Goldman Sachs (NYSE:GS) has projected the country's GDP growth to stand at 6.2% for the fiscal year 2024. The forecast credits the government's proactive measures to curb food inflation, particularly significant in an election year, as a key factor in maintaining economic stability. Notably, these efforts are expected to postpone any potential rate cuts until the fourth quarter.
Following the elections, there's an expectation that private investment will play a crucial role in revitalizing India's economic growth. Despite the challenges posed by an over-target average inflation rate of 5.1%, driven by supply-side pressures, there is optimism that core inflation might ease to 4.5%. In response to this economic environment, the Reserve Bank of India (RBI) has signaled its intention to hold steady on interest rates through the latter part of next year, with only minor easing anticipated in the early part of FY25.
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