'More optimistic' on India's recovery prospects; GDP growth to pick up to 9.1% in 2022: Goldman Sachs
By contrast, Goldman Sachs expects China to have "muted growth" at 7.8 per cent in 2021, 4.8 per cent in 2022, and 4.6 per cent in 2023. The US, on the other hand, may grow at 5.5 per cent in 2021, 3.9 per cent in 2022 and 2.1 per cent in 2023.
- Nov 23, 2021,
- Updated Nov 23, 2021 6:08 PM IST
International financial services company Goldman Sachs has said it is "more optimistic" on India's growth recovery prospects because of significant catch-up potential.
Goldman Sachs, in its latest report 'GS Macro Outlook 2022: The Long Road to Higher Rates', said it expects India to grow at 8 per cent in 2021, which is the highest among all the major economies of the world.
"We expect India growth to pick up from 8 per cent in 2021 to 9.1 per cent in 2022 given its significant catch-up potential following the hit from the Delta wave," the report said.
It expects India's real GDP growth at 6.4 per cent in 2023.
By contrast, Goldman Sachs expects China to grow at 7.8 per cent in 2021, 4.8 per cent in 2022, and 4.6 per cent in 2023. The US, on the other hand, may grow at 5.5 per cent in 2021, 3.9 per cent in 2022 and 2.1 per cent in 2023.
As per the company, the key driver of the muted outlook for China is a "negative swing in the property sector growth impulse" from an average of +1.50 pp (percentage point) in the last five pre-pandemic years to just above -1pp in 2022 and beyond. It reflects the negative impact of deleveraging on construction, consumption, government spending, real estate services, and construction materials activity.
"Growth trends in the major emerging economies are likely to look more disparate, with relative weakness—both relative to consensus and to the long-term trend—in China and Brazil, but a strong performance in India and Russia," the report says.
On the global level, Goldman Sachs said although the fastest pace of recovery now lies behind, there's an expectation of a "strong" global growth in coming quarters. The reason for high hopes is "continued medical improvements", a "consumption boost" from pent-up saving, and "inventory rebuilding".
For 2022, Goldman Sachs thinks the global GDP is likely to rise 4.5 per cent, more than 1pp above potential. "Especially in the advanced economies —except the Euro area where Q3 was very strong— we expect a significant near-term acceleration that should extend well into 2022," the report said.
India's GDP in the April-June quarter grew at a record 20.1 per cent as compared to the same quarter last year. State Bank of India Ecowrap report released on Monday estimates the country's GDP growth to be around 8.1 per cent with an upward bias for Q2 FY22.
The Reserve Bank of India (RBI), on the other hand, expects the Q2 FY22 GDP to grow from 7.3 per cent to 7.9 per cent. For the full fiscal year, the RBI expects the GDP growth at 9.5 per cent.
Also read: Icra lifts Q2 GDP growth to 7.9% post govt spending increases Also read: Fitch affirms 'BBB-' rating for India, forecasts 8.7% GDP growth in FY22Also read: MPC meet: RBI projects FY22 GDP growth at 9.5% Also read: GDP growth estimated to be 8.1% in Q2 FY22: SBI Ecowrap
International financial services company Goldman Sachs has said it is "more optimistic" on India's growth recovery prospects because of significant catch-up potential.
Goldman Sachs, in its latest report 'GS Macro Outlook 2022: The Long Road to Higher Rates', said it expects India to grow at 8 per cent in 2021, which is the highest among all the major economies of the world.
"We expect India growth to pick up from 8 per cent in 2021 to 9.1 per cent in 2022 given its significant catch-up potential following the hit from the Delta wave," the report said.
It expects India's real GDP growth at 6.4 per cent in 2023.
By contrast, Goldman Sachs expects China to grow at 7.8 per cent in 2021, 4.8 per cent in 2022, and 4.6 per cent in 2023. The US, on the other hand, may grow at 5.5 per cent in 2021, 3.9 per cent in 2022 and 2.1 per cent in 2023.
As per the company, the key driver of the muted outlook for China is a "negative swing in the property sector growth impulse" from an average of +1.50 pp (percentage point) in the last five pre-pandemic years to just above -1pp in 2022 and beyond. It reflects the negative impact of deleveraging on construction, consumption, government spending, real estate services, and construction materials activity.
"Growth trends in the major emerging economies are likely to look more disparate, with relative weakness—both relative to consensus and to the long-term trend—in China and Brazil, but a strong performance in India and Russia," the report says.
On the global level, Goldman Sachs said although the fastest pace of recovery now lies behind, there's an expectation of a "strong" global growth in coming quarters. The reason for high hopes is "continued medical improvements", a "consumption boost" from pent-up saving, and "inventory rebuilding".
For 2022, Goldman Sachs thinks the global GDP is likely to rise 4.5 per cent, more than 1pp above potential. "Especially in the advanced economies —except the Euro area where Q3 was very strong— we expect a significant near-term acceleration that should extend well into 2022," the report said.
India's GDP in the April-June quarter grew at a record 20.1 per cent as compared to the same quarter last year. State Bank of India Ecowrap report released on Monday estimates the country's GDP growth to be around 8.1 per cent with an upward bias for Q2 FY22.
The Reserve Bank of India (RBI), on the other hand, expects the Q2 FY22 GDP to grow from 7.3 per cent to 7.9 per cent. For the full fiscal year, the RBI expects the GDP growth at 9.5 per cent.
Also read: Icra lifts Q2 GDP growth to 7.9% post govt spending increases Also read: Fitch affirms 'BBB-' rating for India, forecasts 8.7% GDP growth in FY22Also read: MPC meet: RBI projects FY22 GDP growth at 9.5% Also read: GDP growth estimated to be 8.1% in Q2 FY22: SBI Ecowrap