Goldman Sachs expects the Indian economy to grow at 6.3 per cent in 2024 riding on macro-economic resilience and lower vulnerability to external shocks compared to its peers in the Asia Pacific region.

In its ‘India 2024 outlook’ released today, the global investment bank said that repeated supply side shocks are likely to keep headline inflation above 5.1 per cent in 2024 with core inflation facing resistance at 4.5 per cent.

With $600 billion of forex reserves, the Reserve Bank of India has ample headroom to intervene in the forex markets to keep the currency stable.

According to Goldman Sachs, the rupee is expected to be at ₹83-84 to the US dollar over the next 3-6 months and appreciate to ₹82 over a 12-month period.


In the run-up to the general elections next year, government spending is seen driving growth, chiefly populist measures such as subsidies and transfer payments. Santanu Sengupta, Chief India Economist at GS, said that after the elections, the government spending is likely to be lower and the slack to be picked up by the private sector.

“While we expect the government to continue its focus on capital spending given the medium-term fiscal consolidation path, the rate of growth in capex will likely decrease from next fiscal year,” the report said.

Also read: Tepid capex clouds GDP outlook

The report said there is an increased allocation towards rural employment programs, higher cooking gas subsidies, and an extension of the food subsidy program, while State governments in election mode have also made separate outlays to incentivise voters.

The economic growth next year is seen as a function of private consumer expenditure which is seen rising 6.5 per cent and gross fixed investment at 6.2 per cent.

Sengupta added that if private expenditure do not pick up as expected after the elections, they would have to reassess their growth forecasts.


Repeated supply-side shocks, especially in food and oil, are likely to keep headline inflation from going below 5.1 per cent in 2024, which is above the RBI forecast of 4.7 per cent, compared to an estimated 5.7 per cent in 2023, GS said.

“We expect the government to intervene through subsidies or other measures to keep a lid on food prices in an election year,” it said.

Also read: India not ‘out of woods’ yet, high food prices key risk to CPI inflation: RBI report

With inflation at elevated levels, RBI will have limited room for monetary easing and GS said that it expected the central bank to cut only 50 basis points to 6 per cent by early 2025.

The report said that the ‘higher for longer’ global scenario and elevated domestic inflation will constrain RBI to continue with it hawkish guidance and tight monetary liquidity until it feels confident of achieving its target of 4 per cent.