Media365
Global investment bank Goldman Sachs has upgraded India’s macroeconomic outlook for calendar year 2026, raising its real GDP growth forecast to 6.8 per cent while lowering its projections for inflation and the current account deficit, citing a sharp correction in global crude oil prices following the US-Iran peace deal.
In its latest report, India: Improved Macro Outlook after the US-Iran Deal, Goldman Sachs said easing energy prices have significantly reduced external risks for the Indian economy and improved the country’s overall macroeconomic outlook.
The brokerage has raised its CY2026 real GDP growth forecast by 0.3 percentage points to 6.8 per cent year-on-year, while lowering its headline inflation estimate to 4.4 per cent, down by 0.2 percentage points from its earlier projection.
Goldman Sachs has also trimmed its current account deficit (CAD) forecast to 1.1 per cent of GDP, reflecting improved external sector dynamics driven by lower oil prices and stronger remittance inflows.
According to the report, the revision follows a downward adjustment in its crude oil price assumptions by the firm’s commodities team. Goldman Sachs now expects Brent crude to average USD 82 per barrel during the second half of CY2026, compared with its earlier estimate of USD 92 per barrel. For CY2027, it projects average prices of USD 75 per barrel.
The investment bank said lower energy prices would ease inflationary pressures by reducing the likelihood of further increases in domestic petrol and diesel prices while also lowering input costs for petrochemical products. This, in turn, is expected to support both headline and core inflation.
Goldman Sachs also noted that softer global commodity prices, particularly the sharp decline in urea prices, could help reduce India’s fertiliser subsidy burden, easing near-term fiscal pressures alongside lower crude oil prices.
On the external front, the report said India’s balance of payments position is expected to strengthen, with the brokerage now forecasting a balance of payments surplus of 0.7 per cent of GDP in CY2026.
Despite the improved outlook, Goldman Sachs cautioned that weather-related uncertainties and the lagged impact of earlier fuel price increases could weigh on household consumption in the near term. However, it expects domestic demand and economic momentum to strengthen as the year progresses.
The revised forecasts underscore how easing global commodity prices, particularly crude oil, could provide a significant boost to India’s growth prospects while improving inflation dynamics, fiscal health and external balances.
