GDP Growth To Slide 6.8% In FY27, Narrow Scope To Cut Rates : Goldman Sachs

India's GDP growth rate is expected to moderate to 6.8% in Fiscal 2027 from 7.3% in Fiscal 2026 estimated by foreign brokerage firm Goldman Sachs.

However, according to the national accounts data released by the government on Wednesday, the growth rate in Fiscal 2026 is estimated at 7.4%.

A report by Goldman Sachs further said inflation is likely to firm up, leaving limited scope for the Reserve Bank to cut rates further.

"We expect India's real GDP to grow at 6.7% in (calender year) 2026 and 6.8% in Fiscal 2027," the report said.

Goldman Sachs said the overall private capital expenditure or new investments which help accelerate growth have remained subdued in recent years, and added that the US tariff impinged on the capex in 2025.

Observing that there are 'constraints' on the policy front, the report said the headline inflation will come at 3.9% in 2026, very close to RBI's 4 %, leaving limited scope for rate cuts by the central bank.

"A further 0.25% cut remains possible if US tariff-related uncertainty persists beyond Q1 and impinges on growth," it added.

The rate cuts, coupled with GST rationalization, will help give a push to urban demand and take the bank credit growth to 13% in 2026, the report said.

The fiscal tightening will be a 'lesser drag' on the GDP growth in 2026, it said, adding that the government will settle to narrow the gap further to 4-4.2% in Fiscal 2027.

In what can come as a relief, the brokerage said the worst would be over for the rupee, which has depreciated to all time lows.

The current account deficit is estimated at 1% in 2026 on the back of oil continuing to stay low, it said.

"We think much of the INR underperformance is behind us, and forecast USD/INR at 89.5/91/91 over the next 3/6/12 months, although a prolonged delay in concluding a US-India trade deal would likely worsen the BoP outlook and keep the currency under pressure relative to our baseline," it said.