Goldman Sachs has increased India’s GDP growth forecast for 2026 to 6.8% from 6.5%, citing lower global oil prices and improved supply chain conditions following the US-Iran peace deal.
NEW YORK – Goldman Sachs, the US-based global investment bank, has revised its GDP growth forecast for India, raising it to 6.8% for the calendar year 2026, up from the previous estimate of 6.5%. This adjustment follows the recent US-Iran peace deal, which has contributed to a decline in global oil prices and alleviated supply chain disruptions.
In addition, Goldman Sachs has increased its GDP growth forecast for India for the fiscal year 2027 by 40 basis points, now projecting a growth rate of 6.5%.
According to the latest report from Goldman Sachs, the revision in forecasts comes in light of a significant drop in crude oil prices, which has mitigated risks to the Indian economy. The firm has also lowered its headline inflation forecast by 0.2 percentage points to 4.4% year-on-year and adjusted its current account deficit forecast down by 0.2 percentage points to 1.1% of GDP. Furthermore, it now anticipates a balance of payments surplus of 0.7% of GDP for the year.
The report highlights that the Indian economy has shown resilience amid the challenges posed by the Middle East situation. Fiscal and quasi-fiscal measures have effectively absorbed much of the rise in energy costs, limiting the impact on consumers.
The upward revision is attributed to stronger-than-expected economic activity in the first quarter of calendar year 2026, alongside lower crude oil prices. During this quarter, India’s real GDP grew by 7.8% year-on-year, bolstered by robust investment and a thriving services sector.
Goldman Sachs also noted that the decline in global commodity prices is likely to reduce the government’s subsidy expenses on fertilizers and petroleum products. Additionally, the combination of lower oil prices and increased remittance inflows is expected to enhance India’s external sector outlook.
However, the firm cautioned that weather-related uncertainties and the lingering effects of previous fuel price hikes may pose short-term challenges for consumption before the economy gains further momentum later in the year.
According to IANS, these insights reflect a cautiously optimistic outlook for India’s economic trajectory in the coming years.