The Indian Wire » Business » Goldman Sachs Sees India’s GDP At 9.1% in 2022

Goldman Sachs Sees India’s GDP At 9.1% in 2022

Goldman Sachs. || Source:

Investment Banking company–Goldman Sachs on November 23 said that it expects India’s GDP to register 9.1% in 2022.

India’s economy contracted by 7 percent in 2020, after which Goldman Sachs estimated the economy to grow at 8 percent in 2021 and 9.1 percent in 2022.

Before this revised estimate, Goldman Sachs expected India’s economic growth to 11.1 percent in the fiscal year ending March 2022. It said consumption and investment will be the key drivers of growth in 2022.

“We expect consumption to be an important contributor to growth in 2022, as the economy fully re-opens driven by a notable improvement in the virus situation and adequate progress on vaccination,” Goldman Sachs said in a report.

“We also expect government capital spending to continue, see nascent signs of a private corporate CAPEX recovery, and a revival in housing investment,” it added.

The investment bank estimates the headline CPI inflation to be up to 5.8 percent in 2022 from 5.2 percent in 2021, driven by an increase in core inflation as manufacturers will add input cost to the final product as demand recovers with full economic re-opening.

Santanu Sengupta, India economist, Goldman Sachs said,” Given higher oil prices and the domestic demand recovery, the current account is going to open up and the deficit in our estimation is going to go up from 0.9 percent of GDP to 1.5 percent of GDP.”

The brokerage forecasts cumulative 75 basis points of repo rate hikes in 2022.

“India did a lot in terms of liquidity loosening, keeping the banking system liquidity in surplus throughout the Covid period, and it had cut the reverse repo rate. So, what you’re seeing now is the reversal of that liquidity loosening. So, the banking system liquidity will get tighter over time. And at some point in time, the policy corridor will be narrowed so that the reverse repo rate will be hiked,” said Sengupta.

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Harshita Sharma

A financial news enthusiast and a keen observer of the stock market, I bring to you all the updates from the world of business and finance. So, check out my posts and stay tuned with the major (informational) happenings.

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