Tale of two halves: Goldman sees GDP powered by govt, private sector

livemint.com:

general elections in May. “Post-elections, we expect investment growth to re-accelerate, especially from the private side. While we expect the government to continue its focus on capital spending, given the medium-term fiscal consolidation path, the rate of growth in capex will likely decrease from the next fiscal year," it added.

According to Goldman Sachs, risks around India’s growth outlook are evenly balanced with the main domestic risk emanating from political uncertainty with elections in May 2024. Others, too, have given comparable GDP growth estimates for the ensuing fiscal years. The Reserve Bank of India (RBI) has forecast 6.5% for both FY24 and FY25, though it did refer to risks to this growth path.

In September, Fitch Ratings retained its growth forecast for the current fiscal at 6.3%, saying the Indian economy continues to show resilience despite tighter monetary policy and export weaknesses. It also expects India to maintain 6.5% GDP growth until FY25. S&P Global has predicted 6% GDP growth for FY24, citing a slowing world economy, rising risk of subnormal monsoons and the delayed effect of a rate hike.

At the same time, it estimated 6-7.1% GDP growth during 2024-2026, calling India’s growth prospects “strong". Rating agency Moody’s Investor Services has retained its GDP growth estimate at 6.7% for CY23, stating that the country has shown remarkable resilience amid a global slowdown buoyed by solid domestic demand. Interestingly, while demand in urban areas has growth, rural demand has been tepid due to the uneven monsoons and slow recovery after the covid-19 pandemic.