New Delhi: The State Bank of India has released a report projecting India's real gross domestic product (GDP) growth to be 7.0 percent year-on-year for Fiscal Year 2025, a figure slightly lower than the Reserve Bank of India's forecast of 7.2 percent.
The report attributes this slight adjustment of 20 basis points to the emerging global challenges that are beginning to impact the economy.
"We anticipate a real GDP growth of 7.0 percent year-on-year for Fiscal Year 2025. Our estimate is 20 basis points below the Reserve Bank of India's, largely due to the intensifying global challenges," the report states.
Despite this downgrade, the report acknowledges that the Indian economy continues to demonstrate robust growth and is expected to maintain its position as one of the world's fastest-growing economies in the coming year.
The State Bank of India's GDP estimate for Fiscal Year 2025 is based on several positive factors, including bolstered fiscal buffers supported by dividends, an expected recovery in agricultural activity due to improved monsoon conditions, and an increase in private capital expenditure driven by strong manufacturing activity.
The Monetary Policy Committee (MPC) of the Reserve Bank of India, on Thursday, maintained its overall growth projection at 7.2 percent for Fiscal Year 2025. However, the MPC has revised its growth estimate for the first quarter of Fiscal Year 2025 downward to 7.1 percent, a reduction of 20 basis points from its previous forecast. This adjustment is attributed to lower-than-expected performance in core industry output, corporate profits, and general government expenditure.
RBI Governor Shaktikanta Das, on Thursday, outlined the economic outlook with a projected real GDP growth of 7.2 percent for Fiscal Year 2024-25 and headline inflation easing to 5.1 percent in June.
Das stated, "Real GDP growth for Fiscal Year 2024-25 is projected at 7.2 percent, with growth rates for the first quarter of Fiscal Year 2025 at 7.1 percent, second quarter at 7.2 percent, third quarter at 7.3 percent, and fourth quarter at 7.2 percent. This is the first time we are providing a projected growth rate for the first quarter of Fiscal Year 2025, which is projected at 7.2 percent. The risks are evenly balanced."
He further added, "We have slightly adjusted the growth projection for the first quarter of the current fiscal year compared to the projection we provided in the previous meeting of the Monetary Policy Committee in June. This adjustment is primarily due to the updated information on certain high-frequency indicators that indicate lower than anticipated corporate profitability, general government expenditure, and core industries output."
