Goldman Sachs and EY on Friday said the easing of the West Asia crisis and lower energy prices will be positive for the Indian economy, supporting growth, reducing inflationary pressures and helping rein in fertilizer subsidies, which are seen at double the budget level. “…with the recent decline in oil price forecasts…we raise our real GDP growth forecast for CY2026 by 0.3 percentage point to 6.8% YoY, lower our headline inflation forecast by 0.2pp to 4.4% YoY and our current account deficit forecast by 0.2pp of GDP to 1.1% YoY,” the Goldman Sachs economics research team said in a note. Let’s do it.” EY estimates GDP growth at 6.6-6.8% in 2026-27. “Considering recent geopolitical developments, India’s growth prospects are likely to resume positive momentum if global crude oil prices stabilize at relatively low levels and shipments through the Strait of Hormuz normalize,” it said. Several agencies, including the RBI, had lowered growth estimates due to the war in West Asia, which had hit supplies, put pressure on prices and the financial health of the Centre, and was expected to hit consumption. EY estimates the Centre’s fiscal deficit to be around 4.4% of GDP, as against the budgetary level of 4.3%, while inflation will be around 4.5%. Goldman Sachs said there would be some impact on consumption in the June and September quarters due to previously implemented oil price increases. “Lower crude oil prices as well as petrochemical product prices have declined. While the earlier rise in polymer prices is still likely to push core commodities inflation in the near term, we now expect the impact to be limited (contrary to our previous expectations), with incremental price increases in the core commodities basket less likely,” it said.