Goldman Sachs Projects Three RBI Interest Rate Hikes by 2027

Goldman Sachs projects that the Reserve Bank of India will implement three additional interest rate hikes totaling approximately 75 basis points by June 2027. Chief India Economist Santanu Sengupta anticipates these increases will occur in December, February, and either April or June.

Despite the projected rate hikes, Goldman Sachs expects India to maintain an economic growth rate of roughly 7 percent. However, Sengupta identified El Nino as a material risk that could hinder growth and accelerate inflation by 2027, noting that lower reservoir levels may harm the rabi harvest.

Sengupta also flagged crude oil prices as a primary risk to the economy. He stated that sustained prices above $100 per barrel would impede economic growth and inflation more significantly than the projected range of $85 to $95 per barrel.