Leading global financial business Goldman Sachs has raised by 10 basis points its projection for the growth of GDP in India to 6.7 percent, based on big-ticket investments by the government in infrastructure and a huge dividend from the RBI.
“Going forward, we expect investment growth momentum to sustain with extra fiscal space for infrastructure spending given a higher than expected dividend transfer by the RBI. As a result, we recently revised our growth forecasts for 2024 slightly higher by 10 bps to 6.7 per cent,” noted Andrew Tilton, head of emerging markets economic research at Goldman Sachs, in a statement.
“In India, growth momentum remains strong, and while we think core inflation will bottom out in April-June, we expect it to be around 4.0 - 4.5 per cent in July-December,” the financial firm stated.
Nonetheless, the RBI's monetary policy committee has recently expressed caution regarding persistent food inflation.They would most likely wait and watch the progress of the monsoon season and summer crop sowing before deciding on monetary policy easing for the latter half of the calendar year, the report said.
“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 further said.
This report comes amid the confirmation by the Indian Meteorological Department that it has predicted above-average monsoon rains this year, which should help agricultural production that was hit last year by fickle weather.
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