India's economic growth to slow next year amid higher borrowing costs – Goldman Sachs

Economists at Goldman Sachs predict India's economic growth to slow next year, as consumer demand is likely to weaken from higher borrowing costs and fading benefits from pandemic reopening.

Key quotes

“Gross domestic product (GDP) may expand by 5.9% in the calendar year 2023 from an estimated 6.9% this year.”

"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.”

“See a pickup in investment cycle toward the second half of 2023 aiding India's growth rebound.”

“Upside risks to inflation means the Reserve Bank of India will likely raise the benchmark interest rate by 50 basis points in December and another 35 basis points in February, to hit a terminal rate of 6.75%.”