Goldman Sachs revises India GDP growth forecast to 6.8% on demonetisation
Goldman Sachs revises current fiscal's GDP growthearlier projected to be 7.6%to 6.8% as liquidity shortage is likely to hamper domestic activity
New Delhi: Goldman Sachs has forecast a deceleration in India’s GDP growth to 6.8% this fiscal, down from 7.6% last financial year, due to demonetisation of Rs500 and Rs1,000 currency notes. According to the global financial services major, post the ‘dramatic currency reform’ the liquidity shortage would be a significant constraint on domestic activity, which in turn would affect GDP growth. “In the short term, the liquidity shortage appears likely to be a significant constraint on domestic activity, leading us to forecast a deceleration in GDP growth to 6.8% in FY17 (below consensus), down from 7.6% in FY16," Goldman Sachs said in a research note.