RBI report says GDP growth likely to be 6.3% in FY25, tad below govt estimates

New Delhi, PTI: The GDP growth is expected to be about 6.3% in the current fiscal year, a tad lower than the government's estimates of 6.4%, owing to several factors such as weak demand, SBI research report said on Wednesday. According to the first advance estimates (FAE) of National Income for 2024- 25 released by the National Statistics Office (NSO), released on Tuesday, India's economic growth rate is estimated to slip to a fouryear low of 6.4% in 2024-25, because of poor showing by the manufacturing and subdued investments.

Historically, the difference between the estimates of the Reserve Bank of India (RBI) and the NSO is always in the range of 20-30 bps, and hence the 6.4% estimate for the 2024-25 fiscal year is along expected and reasonable lines, the SBI's research report 'Ecowrap' said. "We, however, believe that GDP (gross domestic product) growth for FY25 could be around 6.3%, with downward bias," it said. The report authored by SoumyaKanti Ghosh, Group Chief Economic Adviser, State Bank of India (SBI), also said that per capita nominal GDP is expected to increase significantly in the current fiscal ending March 2025, by Rs 35,000 more than 2022-23, despite a slowdown in real GDP growth and nominal GDP growth remaining almost stagnant.

The FAE of the GDP in general shows a slowdown in aggregate demand in 2024-25, it said. The heads that have positively contributed include government consumption with a growth of 8.5% in nominal terms (4.1% in real terms). Exports have also held the fort with positive growth of 8% (5.9% in real terms). The worrying aspect of the demand is a marked slowdown in gross capital formation, SBI's study said, adding that the capital formation nominal growth declined 270 bps to 7.2 per cent.