Goldman Sachs ups India 2024 GDP forecast to 6.7%; sees RBI rate cut in fourth quarter

Goldman Sachs has revised India's GDP growth forecast for calendar year (CY) 2024 upward by 10 basis points (bps) to 6.7%. Additionally, they anticipate the Reserve Bank of India (RBI) will implement interest rate cuts either in the fourth quarter of 2024 or the third quarter of the ongoing FY25.

Analysts note India's core inflation averaged 3.4% YoY from January to April 2024, expecting it to reach the 4-4.5% range in the latter half of 2024 due to an anticipated rise in core goods inflation slowing from manufacturing cost escalations. The Monetary Policy Committee (MPC) exercises caution regarding persistent food inflation attributed to supply-side disruptions amid prevailing hot weather conditions in several parts of India. Analysts anticipate the RBI closely monitoring monsoon progress and the sowing of the summer (Kharif) crop to assess the food inflation trajectory before considering monetary policy easing.

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