India's gross domestic product (GDP) is expected to rise to 9.1 per cent in calendar year 2022, as compared to an estimated 8 per cent in 2021, Goldman Sachs said on Tuesday.

India's GDP contracted 7 per cent in 2020, Goldman Sachs said in a report titled 'Macro Outlook 2022'.

"We expect consumption to be an important contributor to growth in 2022, as the economy fully re-opens driven by a notable improvement in the virus situation and adequate progress on vaccination," the investment banker said.

"We also expect government capital spending to continue, see nascent signs of a private corporate capital expenditure recovery, and a revival in housing investment," it added.

Goldman Sachs forecast India's headline CPI (consumer price inflation) to increase to 5.8 per cent in 2022 from an estimated 5.2 per cent in 2021.

The forecast is based on a possibility of an increase in core inflation, since manufacturers pass on input costs to consumers as demand recovers with full economic re-opening.

Average oil prices, it added, are expected to rise YoY in 2022.

"We expect the RBI to continue to exit the extraordinary monetary accommodation that has been in force since the beginning of the pandemic," the investment banker said.

It expects the RBI to hike repo rates by 75 basis points in calendar year 2022 (repo rate hike in Q2, 2022) following normalisation of the policy corridor (i.e. reverse repo hike of 40 basis points by Q1 2022).