By Admin 
India Growth Forecast: Goldman Sachs has reduced India’s GDP growth forecast for the financial year 2025-26 to 5.9 percent. Earlier he had estimated 7 percent. This decline is mainly due to global tensions and rising oil prices.
What did Goldman say in the report?
Goldman said in a report on Tuesday that it expects the Indian economy to grow at a rate of 5.9 percent in the year 2026, whereas before the start of the war with Iran, its estimate was 7 percent. On March 13, this Wall Street bank had reduced its growth forecast for the Indian economy to 6.5 percent.
This latest cut to growth estimates by Goldman analysts comes after they changed their assumptions about oil prices and the duration of the supply disruption. High crude oil prices are a major cause of forex, inflation and fiscal risks for India, a net energy importer.
Reasons for reducing growth estimates
- There is an atmosphere of uncertainty in the global markets due to tensions between Iran-Israel and America. Goldman now expects that the almost complete blockage of supplies through the Strait of Hormuz will continue until mid-April and then the situation will return to normal in the next 30 days. During this period, the average price of Brent crude will be $105 in March and $115 in April. After this, it will fall to $ 80 per barrel in the fourth quarter of the year.
- The bank’s analysts now expect inflation in India to rise to 4.6 percent in 2026, whereas earlier their estimate was 3.9 percent. However, it will still remain within the tolerance limit (acceptable limit) of the Reserve Bank of India (RBI). Nevertheless, Goldman expects that the policy repo rate will be increased by 50 basis points to counter the pressure of falling Indian currency.
- The fall in rupee is also a major reason for Goldman’s estimate. After weakening by 4.7 percent last year, the rupee has fallen by 4 percent against the US dollar so far in 2026. The rupee is currently at a record low (around Rs 93-95) against the US dollar. Due to this, imports still remain expensive. Goldman said that since the currency remains under downward pressure, the impact of changes in foreign exchange rates (FX pass-through) on retail prices is likely to be high. The bank further said in its report that India’s current account deficit may increase to 2 percent of GDP in 2026. India’s current account deficit in the period October-December 2025 was 1.3 percent of GDP.
impact on common man
It is clear from Goldman’s inflation estimate of 4.6 percent that inflation may increase in the coming times, which will have an impact on the common man’s pocket. Here, if the price of crude oil increases, the profits of companies ranging from automobile to logistics will be affected. Companies will compensate for this by increasing the prices of goods. Earlier it was being estimated that the Reserve Bank of India (RBI) would cut the repo rate in the next monetary policy meeting, but now it is being estimated to increase it by 0.50 percent.
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