The Indian economy is likely to lose its momentum next year owing to higher borrowing costs and fading benefits from the Covid-19 pandemic reopening, Goldman Sachs said in a report.
India’s Gross domestic product (GDP) may expand by 5.9% in calendar year 2023 from an estimated 6.9% this year, it said in a report.
“Growth will likely be a tale of two halves, with a slower first half as the reopening boost fades, and monetary tightening weighs on domestic demand. In the second half, growth is likely to re-accelerate as global growth recovers, drag from net exports diminishes, and investment cycle picks up.”
India's gross domestic product (GDP) grew by 8.7% in 2021-22.
Further, the firm expects headline retail inflation to ease to 6.1% next year from an estimated 6.8% this year, according to a Bloomberg report.
Inflation has remained above the Reserve Bank of India’s tolerance band of 6% for the last ten months.
According to Bloomberg report, India’s export growth fell sharply in October, when it contracted 16.7% on annual basis from a growth of 4.8% seen in September, pointing to a decline in global demand.
India’s exports saw a contraction for the first time in the post-pandemic phase and the last time exports contracted was back in February 2021.