Goldman Sachs raises India FY27 growth forecast to 7% as policy uncertainty eases

Goldman Sachs has raised India’s gross domestic product (GDP) growth forecast for 2026-27 (FY27) to 7% from 6.8% earlier, driven by improving trade arithmetic and an expected revival in private investment as policy uncertainty fades.

Shantanu Sengupta, Chief India Economist at Goldman Sachs, said, “On the trade side… the arithmetic will get you better.” He added that the bigger support will come from investment activity, stating, “With this uncertainty overhang now gone, some of this we think will come back in a couple of quarters.”

He also pointed to improving investor sentiment and capital flows. On recent flows, Sengupta said, “You’re already a billion and a half positive in the first 10 days of February, versus about $3 billion negative in January.”

“We think you can contain the current account deficit within 1% of GDP,” he added.

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Arup Rakshit, Group Head, Treasury at HDFC Bank, expects the rupee to remain range-bound for now. “I would expect the rupee to trade in a 90-92 range. I don’t think we are likely to see anything below 89.80 at this juncture,” he said.

Rakshit said any further appreciation would largely depend on global dollar moves. He said, “If Dollar Index keeps falling… that can then lead to a rupee appreciating further.”

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For the entire interview, watch the accompanying video

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