Goldman Sachs marginally reduced his projection for economic growth of India after storing 25 % “mutual” tariff to Indian goods by US President Donald Trump.
Revised projection of GDP
Goldman Sachs gave his revised outlook during these calendar years (CY):
- CY25: Goldman Sachs reduced GDP growth in India by 0.1 percentage point to 6.5 %.
- CY26: The projection was further reduced by 0.2 percentage point to 6.4 % year -on -year.
The report also suggests that some of these tariffs are likely to be reduced by negotiations over time.
However, another risk of the disadvantage for growth trajectory is based mainly on the channel of uncertainty and emphasizes how the sentiment of investors and business planning is enveloped by the unpredictability of business relations in the US and India.
Inflationary outlook
Despite the slowdown of Goldman Sachs growth, he noted that inflation is also decreasing. The brokerage company revised Indian inflation prognosis by 0.2 percentage point per calendar year 2025 and fiscal year 2026, now sitting on 3 %year -on -year.
This price cooling is largely attributed to softening the cost of vegetables. However, the report warns that such low levels of inflation are rare and can be vulnerable to unexpected shocks, which further describes them as lying in the “left tail of the historical distribution of India”.
Key risks and contrasting attitude RBI
The message emphasizes two key risks that could prevent further inflation:
- Fast and friendly resolution of business interviews in the US and India.
- Sharper than the expected increase in core inflation, especially when approaching the threshold of 4 %.
The attitude of the report on inflation and growth projections is contrary to the Indian Reserve Bank (RBI). In a statement on the RBI policy on Wednesday, the report rate maintained unchanged.
The central bank also maintained its growth projection of 6.5 % for the current fiscal. RBI, however, revised its inflation of consumer index price (CPI) prognostics significantly down for FY26, from 3.7 % to 3.1 %.
(With inputs from or)
(Tagstotranslate) Goldman Sachs (T) India
