The third-largest economy in Asia should rebound in 2020 as global conditions are set to improve, helping India’s economic growth to pick up, according to US investment bank Goldman Sachs.
The bank’s chief economist and head of global economics and markets research Jan Hatzius said the extent of the recovery will likely be modest instead of returning India to the growth rates seen a few years back.
“As we go into 2020, we think there’s a tentative sense of stabilization in the Indian economy,” Hatzius told CNBC.
In its report last week, Goldman projected India’s growth to fall to 5.1 percent this year from roughly seven percent annually in 2017 and 2018. The bank forecasts the country’s growth to pick up to 6.4 percent in 2020.
According to Hatzius, an improving global economy and domestic policies such as corporate tax cuts should help to lift economic activity in India. He also said that the country’s central bank, the Reserve Bank of India, “probably isn’t quite done” with easing monetary policy yet.
“We’ll see how strong the rebound is. We did see a significant deceleration; will it be able to make that up in 2020 and 2021 to get back to the growth rates that we saw a couple years ago?”
Hatzius continued: “That may be a tall order, but incrementally we do think that growth probably picks up somewhat from here.”
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