The State Bank of India in a report projects that India’s real GDP will grow by 7.0 per cent year-on-year in FY25, which is slightly lower than the RBI’s forecast of 7.2 per cent. The report noted that the slight downgrade by 20 basis points is based on the global headwinds that are beginning to materialize.
“We expect real GDP to grow by 7.0 per cent y/y in FY25. Our estimate is 20bps below RBI’s largely based on global headwinds, which are quickly crystallizing,” said the report.
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Despite the downgrade by the report, it noted that the Indian economy continues to exhibit robust growth and is expected to remain one of the fastest-growing economies this year.
The SBI report noted that its GDP estimate for FY25 is based on several positive factors, including enhanced fiscal buffers supported by dividends, an anticipated recovery in agricultural activity due to improved monsoon conditions, and a push in private capital expenditure amid strong manufacturing activity.
The Monetary Policy Committee (MPC) of the Reserve Bank of India on Thursday maintained its overall growth projection at 7.2 per cent for FY25. However, the MPC has revised its Q1FY25 growth estimate downward to 7.1 per cent, a 20 basis points reduction from its previous forecast. This adjustment is due to lower-than-anticipated performance in core industry output, corporate profits, and general government expenditure.
RBI Governor Shaktikanta Das outlined the economic growth with real GDP growth of 7.2 per cent for the fiscal year 2024-25 and headline inflation eased to 5.1 per cent in June, on Thursday.
Das said, “Real GDP growth for 2024-25 is projected at 7.2 per cent with Q1 at 7.1 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent, and Q4 at 7.2 per cent. Real GDP growth for Q1 2025-26, this is something which we are giving for the first time, is projected at 7.2 per cent. The risks are evenly balanced.”
He added, “We have slightly moderated the growth projection for the first quarter of the current financial year in relation to the projection we gave in the previous MPC in June. This is primarily due to updated information on certain high-frequency indicators which show lower than anticipated corporate profitability, general government expenditure, and core industries output.”
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