Goldman sees India`s real GDP growth at 8.2% in FY11

Last Updated: Friday, December 4, 2009 - 18:53

Mumbai: India`s real GDP growth in the
financial year 2010-11 is likely to be 8.2 per cent, on the
back of acceleration in domestic demand, especially
infrastructure-led investment, Goldman Sachs said in a report
today.

"We forecast real GDP to grow by 8.2 per cent in FY11
and 8.7 per cent in FY12, on the back of an acceleration in
domestic demand," the report said.

Reforms in infrastructure, fiscal, and financial
sectors by the respective policymakers would also be critical
for the country to return to the high growth path, it said.

The WPI-based inflation, which has started inching up
now, is likely to go to 6.5 per cent by March, 2010 due to
rising food and commodity prices, the report said.

Goldman Sachs also forecast the Reserve Bank to hike
its policy rates in 2010, starting in January, by hiking repo
and reverse repo rates.

Goldman expects 300 basis points of effective policy
tightening starting in January with the Reserve Bank hiking
the repo and reverse repo rates, according to the report.

This will constitute a removal of monetary
accommodation (by the central bank) and moving rates to
neutral, it said.

PTI



First Published: Friday, December 4, 2009 - 18:53

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