SBI cuts India’s GDP growth forecast for FY25 to 6.3%
MUMBAI MUMBAI: The State Bank of India (SBI) has revised its forecast for India’s GDP growth in FY25 to 6.3 per cent, slightly lower than the National Statistical Office’s (NSO) estimate of 6.4 per cent. The SBI noted a “downward tilt” in its forecast, citing several challenges impacting economic growth. It said that “GDP growth for FY25 may be around 6.3 per cent with a downward tilt”. According to the SBI report, a slowdown in manufacturing and credit growth, along with the impact of the high base effect, has lowered expectations for FY25.
Additionally, the first advance estimate (FAE) for GDP reflects a broad-based slowdown in aggregate demand during the financial year. The report highlighted the contribution of specific sectors to GDP growth. Government consumption is projected to grow by 8.5 per cent in nominal terms and 4.1 per cent in real terms, providing some support to the economy. Despite these positive trends, the report expressed concern over a slowdown in key industrial sectors. All sub-segments of industry are expected to slow down in FY25, leading to an estimated growth rate of 6.2 per cent, much lower than the 9.5 per cent recorded in FY24.
It said “manufacturing and mining are both expected to decline sharply in FY25 compared to FY24”. In the agriculture sector, there is a ray of hope with an expected growth of 3.8 per cent in FY25, up from 1.4 per cent in FY24. This improvement is likely to contribute positively to the overall economic outlook.The report also noted a significant increase in nominal GDP per capita, with the NSO estimating an increase of around Rs 35,000 compared to FY23.Nominal GDP growth, however, is projected to remain stable, growing at 9.7 per cent in FY25, as against 9.6 per cent in FY24. SBI’s revised estimates reflect the challenges India faces in sustaining high growth rates amid global uncertainties and domestic economic pressures.
The bank’s analysis emphasised the need for targeted interventions to address manufacturing and credit growth to boost overall economic performance. The First Advance Estimates (FAE), which provide an early glimpse of GDP trends, suggest that FY25 will likely be a year of moderate growth, requiring a balanced approach from policymakers to sustain momentum in key sectors while addressing bottlenecks.
