Goldman Sachs Raises India's FY27 Growth Forecast to 6.5%, Sees Lower Inflation

Goldman Sachs has revised upward its growth forecast for India to 6.5% for the financial year 2027, also projecting that inflation will ease to lower levels — a combination that signals one of the world's most closely watched investment banks sees India's economic fundamentals strengthening, Moneycontrol reported.

The upgrade is notable for its timing. Global economic conditions remain turbulent, with trade tensions, elevated interest rates in major economies, and geopolitical uncertainty weighing on growth forecasts worldwide. Against that backdrop, Goldman's optimism about India stands out, reinforcing the narrative of India as a relative outperformer among large emerging markets.

The lower inflation projection is equally significant. High inflation has been a persistent concern for Indian households and the Reserve Bank of India, constraining the central bank's ability to cut interest rates aggressively. If inflation does indeed moderate as Goldman projects, it would give the RBI more room to ease monetary policy, potentially lowering borrowing costs for home loans, business credit and consumer finance.

The forecast revision is likely to influence foreign institutional investor sentiment toward Indian equities and bonds. Overseas investors closely track such projections from bulge-bracket banks when making allocation decisions. For ordinary Indians, the broader implication is of an economy growing at a healthy clip with prices rising more slowly — a combination that, if it materialises, would translate into improved real incomes and greater purchasing power.