Indian economy to grow at 6.8% in FY27; fiscal consolidation to continue: Goldman Sachs

Goldman Sachs predicts India's growth at 6.8%

India’s economy is expected to remain on a steady growth path in FY27, according to Goldman Sachs. The investment bank estimates India’s real GDP growth at 6.8 percent for FY27, a moderation from 7.3 percent in FY26.

Growth will be underpinned by a decisive policy pivot toward supporting demand, Goldman Sachs said.

In 2025, India delivered income-tax relief, rationalised goods and services tax (GST),  extended aggressive liquidity support and the RBI cumulatively cut the repo rate by 125 basis points to support consumption.

Goldman Sachs expects private consumption to strengthen further in FY27. It, however, cautioned that a broad-based private capex cycle, which has been a concern, may take time to materialise, with trade uncertainty and high US tariffs acting as near-term constraints.

On the policy front, inflation is expected to hover close to the RBI’s 4 percent target, limiting the scope for further rate cuts beyond a possible 25-basis-point easing if growth risks intensify, it said.

On the fiscal front, there is positive news. Fiscal consolidation is likely to continue, with the Centre targeting a 4–4.2 percent deficit in FY27.

(This is a developing story, please check back for updates.)