Goldman Sachs has revised its FY21 growth forecast for India upwards to a 10.3 per cent contraction. The investment firm had previously estimated the India economy to undergo a 14.8 per cent contraction this fiscal. This uptick in Goldman Sachs' projections for Indian economy going forward comes on the back of rising hopes on the COVID vaccine front.
The firm had projected India's GDP to rebound to 13 per cent in the next fiscal, i.e financial year 2021-22. According to PTI, Goldman Sachs stated that the recent developments on the vaccine front will be beneficial to the recovery of the economy. Recently, Pfizer and Moderna both had announced that their respective COVID-19 vaccine candidates have shown over 90 per cent efficacy at preventing COVID-19 infection.
Meanwhile, The Reserve Bank of India (RBI) expects the country's GDP to contract by 9.5 per cent on real basis during the current financial year. It attributes the contraction to the impact of COVID-19 pandemic has had on the Indian economy.
According to a Goldman Sachs report published on September 17, India's GDP is expected to stage an impressive recovery in the next financial year. The report said the Indian economy will recover with a growth of 13 per cent on a low basis and an added benefit of an expected successful COVID-19 vaccine.
"There is still a high degree of uncertainty around the outlook - and growth could significantly overshoot or undershoot these forecasts - depending on the course taken by the virus and vaccine-related developments in the coming year," the Goldman Sachs report had said.
Goldman Sachs expects a normalisation in the government containment policies and travel restrictions by mid-2022, once the vaccine is discovered and successfully distributed.