Goldman Sachs Slashes India 2026 Growth Forecast to 5.9% Amid Currency Pressures

As per Reuters report, Goldman Sachs has adjusted its growth forecast for India, predicting a 5.9% growth rate for 2026. This revision comes as the Indian economy grapples with currency depreciation pressures. 

Growth Forecast Adjustment 

On March 24, 2026, Goldman Sachs announced a revised growth forecast for India, reducing it from a previous estimate of 7% to 5.9%.  

The adjustment follows changes in assumptions regarding oil prices and supply disruptions. 

Elevated crude prices pose significant risks to India's foreign exchange, inflation, and fiscal stability. 

Impact of Oil Prices 

The near-shutdown of flows through the Strait of Hormuz is expected to last until mid-April, with Brent crude oil prices averaging $105 in March and $115 in April.  

Prices are projected to decrease to $80 per barrel by the fourth quarter of the year. 

Inflation and Currency Depreciation 

Inflation in India is anticipated to rise to 4.6% in 2026, up from the earlier expectation of 3.9%. 

Despite remaining within the central bank's tolerance band of 2-6%, a 50 basis points hike in the policy repo rate is expected to counteract the pressures from a depreciating currency.  

The rupee has fallen 4% against the US dollar in 2026, following a 4.7% decline last year. 

Current Account Deficit Concerns 

India's current account deficit is projected to widen to 2% of GDP in 2026, up from 1.3% in the October-December 2025 period.  

The depreciation of the rupee is likely to have a significant FX pass-through to retail prices, further impacting the economy. 

Read More: Core Sector Growth Slows To 2.3% In February 2026 Amid Weak Output! 

Conclusion 

Goldman Sachs' revised forecast for India's growth and the anticipated rate hike reflect the challenges posed by currency depreciation and elevated oil prices. These factors contribute to a complex economic landscape for India in 2026. 

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