Indian economy is expected to clock 7.9 per cent growth in the current fiscal driven by better monsoon, Government pay hike, key reforms and FDI inflows, Goldman Sachs said on Thursday. The global financial services major said the GDP is expected to improve gradually and for the April-June quarter it may slow a tad to 7.8 per cent, in part due to unfavorable base. It had grown at 7.9 per cent in the previous quarter.
“We forecast real GDP to grow by 7.9 per cent for 2016-17, year-on-year, higher than consensus expectations of 7.5 per cent and up from 7.6 per cent in FY16,” Goldman Sachs said in a research note. It further noted that a better monsoon, civil service wage hike following 7th Pay Commission, a favorable fiscal monetary policy mix, the recent passage of key reforms and continued FDI inflows should all support growth. It said key risks to India's growth trajectory include a faster pace of US Fed rate hikes than is currently priced in, concerns about Chinese growth and capital flows.