Mumbai (Maharashtra) [India], January 8 : 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.
SBI noted a "downward bias" in its projection, citing several challenges affecting economic growth. It said "GDP growth for FY25 could be around 6.3 per cent, with downward bias".
According to the SBI report, the slowdown in manufacturing and credit growth, coupled with the impact of a high base effect, has dampened expectations for FY25. Additionally, the First Advance Estimates (FAE) for GDP reflect a broader deceleration in aggregate demand during the fiscal year.
The report highlighted the contributions of specific sectors to GDP growth. Government consumption is projected to grow at 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 the deceleration in key industrial segments.
All sub segments of the industry are expected to slow down in FY25, leading to a projected growth rate of 6.2 per cent, significantly lower than the 9.5 per cent recorded in FY24.
It added "Both Manufacturing and Mining is expected to decelerate sharply in FY25 as compared to FY24".
In the agriculture sector, a silver lining appears 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 per capita nominal GDP, with the NSO estimating an almost Rs 35,000 rise compared to FY23. However, nominal GDP growth is anticipated to remain stagnant, growing by 9.7 per cent in FY25 compared to 9.6 per cent in FY24.
SBI's revised projection reflects the challenges India faces in sustaining high growth rates amid global uncertainties and domestic economic pressures. The bank's analysis emphasized the need for targeted interventions to address manufacturing and credit growth to bolster overall economic performance.
The First Advance Estimates (FAE), which provides an early glimpse of GDP trends, suggests that FY25 will likely be a year of moderated growth, requiring a balanced approach from policymakers to sustain momentum in key sectors while addressing headwinds.