Goldman Sachs cuts India's growth forecast to 5.9% for 2026
Goldman Sachs has trimmed its outlook for India's economy, now expecting 5.9% growth in 2026 instead of the earlier 7%.
The downgrade comes as high crude oil prices and supply issues, mainly due to the Iran conflict, put extra pressure on India, which relies heavily on energy imports.
Inflation and interest rates
Inflation is also expected to tick up to 4.6% in 2026 (from a previous estimate of 3.9%), staying within the central bank's comfort zone but still squeezing wallets.
Plus, with the rupee dropping 4% against the dollar, everyday goods could get pricier.
To help steady things, Goldman thinks a rate hike is likely on the cards soon.
Current account deficit concerns
India's current account deficit is set to rise too, from 1.3% at the end of 2025 to about 2% of GDP in 2026, as oil prices are predicted to stay high before easing later in the year.
All these factors are making it tougher for India's economy to keep up its earlier pace.