India poised to be among fastest-growing economies until 2030: Goldman Sachs

The report highlights that India’s earnings have stabilized in recent years, with a "mid-teen profit growth momentum" expected to sustain through 2030

PGurus Newsdesk

September 25, 2024

The report highlights that India’s earnings have stabilized in recent years, with a "mid-teen profit growth momentum" expected to sustain through 2030

Positive outlook for India’s economy through 2030

India is set to remain one of the fastest-growing economies in the world until 2030, fueled by robust GDP growth and positive investor sentiment, according to a recent report from global brokerage firm Goldman Sachs.

The report highlights that India’s earnings have stabilized in recent years, with a “mid-teen profit growth momentum” expected to sustain through 2030. This resilience is particularly notable amid global economic uncertainties, demonstrating India’s strong economic fundamentals.

Goldman Sachs noted that the total earnings growth and market capitalization of the Nifty index have achieved an impressive 18 percent compound annual growth rate (CAGR) over the past five years. As this trend continues, the profit pool is likely to shift toward investment cyclicals, including sectors like automobiles, real estate, chemicals, and industrials, which are projected to experience significant profit increases. Consumer cyclicals are also expected to see the highest absolute growth.

In alignment with these optimistic forecasts, Moody’s Analytics predicts that the Indian economy will grow at a faster rate of 7.1 percent for the fiscal year 2025 (FY25). The firm has maintained its growth forecast for India at 6.5 percent for 2025, with an anticipated acceleration of 6.6 percent in 2026.

S&P Global Ratings echoed this sentiment, retaining India’s growth forecast at 6.8 percent for the fiscal year 2024-25. The agency indicated that GDP growth moderated in the June quarter, attributed to high interest rates dampening urban demand, which aligns with their projection of 6.8 percent GDP growth for the full fiscal year.

The report also highlights concerns regarding food inflation, which the Reserve Bank of India (RBI) views as a significant obstacle to potential rate cuts. “Our outlook remains unchanged: we expect the RBI to begin cutting rates in October at the earliest and have penciled in two rate cuts for this fiscal year ending March 2025,” the report stated.

As India navigates these economic dynamics, the outlook remains positive, reinforcing the country’s position as a key player on the global economic stage.

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