New Delhi: SBI Research predicts a slowdown in the GDP growth of India to around 7% in the April-June quarter due to moderation in sales growth of manufacturing companies. The State Bank of India’s ‘Nowcasting Model’ forecasts GDP growth for Q1 of the current financial year at 7-7.1%, with some downward bias in the GVA as well.
This projection aligns with the RBI’s estimate of 7.1% growth in Q1. ICRA, on the other hand, expects a slower growth rate of 6% in the same period. One of the key reasons cited for the sluggish growth is the decline in government’s capital expenditure during the Lok Sabha elections.
Despite these challenges, agriculture sector growth is expected to accelerate to 4.5-5% fueled by favorable monsoon rains. The research note by SBI Group Chief Economic Advisor also highlighted the Indian economy’s resilience amidst global challenges like rising freight costs.
With stagnant policy interest rates by RBI since 2023, there is scope for monetary policy easing to combat inflation. The recent decline in retail inflation to 3.54% in July has further paved the way for potential interest rate cuts in India, in line with global trends.
Overall, the outlook for the Indian economy remains cautiously optimistic, awaiting the official data release by the Ministry of Statistics & Programme Implementation to validate these projections.
Published 26 August 2024, 21:33 IST
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