Goldman Sachs has raised India’s CY26 real GDP growth forecast by 0.3 percentage points to 6.8%, reversing its earlier March downgrade. The upgrade comes after the US-Iran peace deal and lower crude oil prices, along with stronger domestic economic activity.
The brokerage lowered its average oil price forecast to $82 per barrel for Q3-Q4 CY26 from $92, and to $75 per barrel for CY27 from $80. It said lower energy costs are improving India’s macroeconomic outlook as the country is one of the world’s largest crude oil importers.
India’s economy grew 7.8% year-on-year in the first quarter of CY26, supported by strong investment and services. Gross fixed capital formation increased 10.8%, while services sector growth reached 9.9%, driven by trade, hotels and transport.
Goldman Sachs also cut its CY26 CPI inflation forecast to 4.4% from 4.6% and reduced its FY27 inflation forecast to 4.9% from 5.1%. Lower crude oil prices are expected to ease petrol, diesel and petrochemical costs, helping keep inflation under control.
The brokerage lowered India’s CY26 current account deficit forecast to 1.1% of GDP from 1.3%. It also reduced its oil import estimate to $215 billion from $220 billion, raised its remittance forecast to $140 billion, and now expects a balance of payments surplus of 0.7% of GDP.
India’s crude oil basket fell to $70.71 per barrel on June 24, 2026, but petrol and diesel prices are unlikely to be cut immediately. State-run oil marketing companies reportedly incurred nearly ₹1 lakh crore in under-recoveries on petrol, diesel and LPG during March-May 2026 and are expected to recover these losses before passing on lower fuel prices.
Union Minister Suresh Gopi said fuel prices depend on several factors, including the time taken for cheaper crude to reach India and move through the supply chain. While countries like China and the U.S. have already reduced retail fuel prices, the benefit in India may take longer to reach consumers.
The RBI said India’s crude oil basket remains elevated even though inflation stayed stable in May. It added that a normal southwest monsoon could support growth and inflation, but global risks remain. The RBI also reported net forex sales of $8.944 billion in April, while India’s gold reserves remained unchanged at 880.52 tonnes.
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