India Insulated From US-China Trade War: Goldman Sachs

Despite global economic shocks, India will be relatively insulated from global economic shocks that are being expected from a potential tre war between United States and China in 2025, according to a Goldman Sachs report.

This is because despite ongoing global uncertainties India's long-term structural prospects remain robust.

"In 2025, we believe India will likely be a relatively insulated economy from global shocks emanating out of a potential tre war between US and China", said report.

However, a cyclical growth slowdown is also anticipated with country's GDP growth forecast on an imminent decline to 6.3% year-on-year in 2025, report ded.

This slowdown is due to constant fiscal consolidation and tighter credit growth because of macro-prudential measures taken by Reserve Bank of India.

report also speculates that RBI's monetary policy will remain cautious in 2025 and central bank will begin easing interest rates from first quarter of 2025, with a cumulative reduction of 50 basis points by mid-year.

RBI is likely to proceed carefully, amid global tre uncertainties and given strong dollar trend.

Retail loan growth may have lower interest rates and may remain subdued due to macro-prudential tightening.

Though inflation may align with RBI's target next year, rate-cut cycle is expected to be limited. RBI, report says, is likely to maintain a balanced approach, keeping monetary policy close to national neutral rate, estimated at 6 per cent.

report furr suggests a 25-basis-points repo-rate cut in February 2025, followed by anor 25-basis-point cut in April.

central bank is also allowed to maintain a liquid surplus, which allows overnight inter-bank rates to fall 5.75%, effectively delivering 75-basis-points easing from current level of 6.50%.

Despite challenges in near future, Indian economy is anticipated to maintain amidst global uncertainties, showcasing resilience in face of challenges.