Goldman Sachs Raises India's 2023 GDP Forecast To 6.3%

Goldman Sachs expects a strong trend in services exports, while the trend of lower merchandise imports is likely to continue, leading to a net export boost in 2023.

Real exports may grow above 4% year-on-year, while flat real import growth may be seen in 2023, it said.

However, the brokerage lowered the country's investment growth forecast to 7.9% year-on-year in the calendar year 2023, compared to 9% year-on-year earlier.

The central government is currently leading most of the capex push for the economy, while private sector investment remains tepid, it said.

Goldman Sachs expects a pick-up in government expenditure in the second half of fiscal 2023–2024 before the general elections in 2024.

Goldman Sachs stressed the "pockets of strength" in service demand, as the services PMI clocked a 13-year high of 62, domestic air passenger traffic exceeded pre-pandemic levels, and service exports held up despite a slowdown in global growth.

But the demand for private sector investment, the brokerage said, has remained muted, as seen by a slowdown in industrial credit growth, led by large industries, in recent months.