Investment bank, Goldman Sachs has revised its GDP growth forecast for India upwards to 6.7% for 2024, attributing the increase to a substantial dividend transfer by the Reserve Bank of India.
Analysts at the bank anticipate sustained growth momentum for the country, supported by additional fiscal space created by the RBI's dividend transfer.
“In our view, they may want to see progress of the monsoons and sowing of the summer (Kharif) crop to assess the food inflation trajectory in 2H CY24, before pivoting towards monetary policy easing," the Goldman Sachs report said.
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“We continue to expect a shallow easing cycle of total 50 bps rate cuts from the RBI, with 25 bps rate cuts each in Q4 CY24 and Q1 CY25," the analysts said.
Regarding when the RBI will cut rates, Goldman Sachs projects a repo rate cut only towards the end of the 2024 calendar year, probably in the December MPC meeting, as against the previous forecast of a rate cut in the July to September quarter.