Goldman Sachs hikes India’s 2023 GDP forecast to 6.3%

  • Goldman Sachs has pegged GDP growth for the Jan-March 2023 quarter at 4.9%, 6.5% for April-June, 5.9% for July-September and 8.1% for October-December.

Saurav Anand
Published26 May 2023, 10:23 PM IST
FILE PHOTO: The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City. REUTERS/Andrew Kelly/File Photo
FILE PHOTO: The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City. REUTERS/Andrew Kelly/File Photo(Reuters)

New Delhi: Goldman Sachs on Friday raised India’s GDP growth forecast for calendar year 2023 by 30 basis points to 6.3%, citing a rise in exports. The earlier forecast was made in November, which showed that Indian economy will grow at 5.9%.

“There are pockets of strength in services demand — Services PMI clocked a 13-year high of 62.0, domestic air passenger traffic exceeded pre-pandemic levels and services exports have held up despite a slowdown in global growth,” said Santanu Sengupta, India economist at Goldman Sachs.

Private sector investment demand has been muted in recent months. But, sequential growth in government expenditure is expected to come in stronger than earlier expected, given spending trends in January and February, said Sengupta.

Goldman Sachs has pegged GDP growth for the Jan-March 2023 quarter at 4.9%, 6.5% for April-June, 5.9% for July-September and 8.1% for October-December.

Goldman Sachs expects a strong trend in services exports, while the trend of lower merchandise imports is likely to continue, leading to a net export boost in 2023.

Real exports may grow above 4% year-on-year, while flat real import growth may be seen in 2023, it said.

However, Goldman Sachs lowered the country’s investment growth forecast to 7.9% year-on-year in the calendar year 2023, compared to 9% year-on-year earlier.

The central government is currently leading most of the capex push for the economy, while private sector investment remains tepid, it said.

Goldman Sachs expects a pick-up in government expenditure in the second half of fiscal 2023–2024 before the general elections in 2024.

Goldman Sachs stressed the “pockets of strength” in service demand, as the services PMI clocked a 13-year high of 62, domestic air passenger traffic exceeded pre-pandemic levels, and service exports held up despite a slowdown in global growth.

But the demand for private sector investment, the brokerage said, has remained muted, as seen by a slowdown in industrial credit growth, led by large industries, in recent months.

In contrast, the Reserve Bank of India has projected GDP growth at 7.8% in April-June, 6.2% in July-September, 6.1% in October-December and 5.9% in Jan-March of 2024, taking the overall GDP growth in 2023-24 to 6.5%.

The National Statistical Organisation (NSO) is scheduled to release the provisional estimate for the GDP growth for the fourth quarter as well for the fiscal 2022-23 on May 31.

Icra estimates the services gross value added (GVA) year-on-year growth to have risen mildly to about 6.4% in Q4 FY23 from 6.2% in Q3 FY23.

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First Published:26 May 2023, 10:23 PM IST
HomeEconomyGoldman Sachs hikes India’s 2023 GDP forecast to 6.3%

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