Mumbai: As the benefit from the post-COVID reopening fades and monetary tightening weighs on domestic demand, Goldman Sachs anticipates India's economic growth to slow to 5.9% next year from an estimated 6.9% growth in 2022.
According to Santanu Sengupta, an economist for Goldman Sachs in India, "we expect growth to be a tale of two halves in 2023, with a slowdown in the first half (due to dwindling reopening effects)".
India's growth was quicker than that of most other emerging economies in the first seven months following their reopening, according to Goldman Sachs, which defines March 2022 as the post-COVID reopening.
As global GDP improves, the net export drag lessens, and the investment cycle picks up, Sengupta predicted that growth will rise back up in the second half.
The Reserve Bank of India (RBI) set the domestic growth rate for 2022–2023 at 7% last week.
Sengupta anticipates that the government will continue to prioritise capital spending and sees indications of a fledgling investment rebound, with favourable conditions assisting an uptick in the economy in the second half.
According to Goldman Sachs, headline inflation will decline from 6.8% in 2022 to 6.1% in 2023.
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