Among other macro parameters, Goldman Sachs sees
current account deficit to be widen, but manageable, at 2.1 percent of
GDP in FY19.
Sharing a positive outlook for Indian economy next
year, Goldman Sachs said that it saw GDP growth accelerating to 8
percent in FY19 from a projected 6.4 percent in FY18.
The global
investment bank sees headline inflation around 5.3 percent in FY19 and
said that the Reserve Bank of India (RBI) could hike policy rates by 75
bps by mid-2019. Beyond this, it believes that the central bank may not
cut rates in a bid to support the economy.
Among other macro
parameters, Goldman Sachs sees current account deficit to be widen, but
manageable, at 2.1 percent of GDP in FY19.
Going forward, it sees the negative impact from GST to
gradually fade over the coming year. In fact, the move to reduce tax
rates for nearly 200 products could boost activity in the next 3-6
months, it said in its report.
Among other steps, it highlighted that bank recap program will unlock credit and private investment growth.
For consumption space, it believes there are tailwinds from the civil service wage hikes which will aid consumption demand.
Among risks, it sees delay in GST-related effects and bank recap, which could pose downside risks.
22 Nov 2017, 11:52 AM