State Bank of India (SBI) has revised the forecast for India’s GDP growth to 6.3 per cent in the financial year 2024-25. The estimate is down from the National Statistical Office’s (NSO) projection of 6.4 per cent.
(Photo: AFP)
State Bank of India (SBI) has revised the forecast for India’s GDP growth to 6.3 per cent in the financial year 2024-25. The estimate is down from the National Statistical Office’s (NSO) projection of 6.4 per cent.
SBI attributed the downgrade to economic challenges, including a slowdown in lending and manufacturing, shortly after the Ministry of Statistics and Programme Implementation released its gross domestic product (GDP).
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“Historically, the difference between RBI’s estimate and NSO’s estimate is always in the range of 20-30 bps and hence the 6.4 per cent estimate of FY25 is along expected and reasonable lines. We, however, believe that GDP growth for FY25 could be around 6.3 per cent, with downward bias,” SBI said.
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The development reflects concerns over a slowdown in lending and manufacturing, coupled with the effects of a large base effect from the previous year.
The bank highlighted that a general slowdown in aggregate demand is evident in the first advance estimates for GDP, which indicate tempered expectations for FY25.
Empirical evidence does suggest a slowdown in credit will push a slowdown in GDP, SBI mentioned.
The Ministry of Statistics has projected India’s GDP estimates for financial year 2024-25 have been maintained at 6.4 per cent .
It expected an uptick in agricultural and industrial activity, along with resilient rural demand in the second half to keep India on a growth path towards achieving 6.4-6.8 per cent expansion by the end of the financial year.
The GDP estimate is significantly lower than the 8.2 per cent GDP growth witnessed in the previous financial year 2023-24.
Further, the NSO data has said the agriculture and allied activities are projected to grow by 3.8 per cent in FY25, up from 1.4 per cent in FY24, driven by robust policy measures and public infrastructure development.
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