Is India’s GDP Growth in Q4 FY25 Set to Remain Resilient?

New Delhi, May 21 (NationPress) In spite of facing challenges from global disturbances, the Indian economy remains remarkably strong, with a forecasted GDP growth of approximately 6.4-6.5 percent for Q4 FY25, as reported by SBI on Wednesday.

To assess GDP quantitatively, the Economic Research Department of the State Bank of India has devised a ‘Nowcasting Model’ that incorporates 36 high-frequency indicators related to industrial activity, service sector performance, and the global economy.

This model employs a dynamic factor approach to derive a common, representative factor from all high-frequency indicators spanning from Q4 of FY13 to Q2 of FY23.

“According to our ‘Nowcasting Model’, the projected GDP growth for Q4 FY25 is anticipated to be around 6.4-6.5 percent,” stated Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at SBI.

Provided there are no substantial adjustments in Q1 to Q3 estimates in the upcoming NSO data release, “we predict FY25 GDP to be at 6.3 percent,” Ghosh added.

The India Meteorological Department (IMD) has indicated that the southwest monsoon is expected to reach Kerala within the next four to five days, ahead of its usual onset date of June 1.

If the monsoon arrives in Kerala as expected, it would represent the earliest onset over mainland India since 2009, when it commenced on May 23.

“India aims for a food grain production target of 354.64 million tonnes for the 2025-26 crop year starting in July, based on forecasts of improved monsoon rainfall. For the current 2024-25 crop year, the target was set at 341.55 million tonnes (to date: 332.3 million tonnes),” the SBI report noted.

Additionally, insights from household surveys show a decline in current household inflation expectations, which fosters increased discretionary spending and propels demand-driven growth. However, the status quo in consumer confidence indicates uncertainty among households regarding global developments and economic prospects—revealing caution that may affect sustainable growth in the short term.

The rapid rise in trade tensions and notably high levels of policy uncertainty are projected to considerably influence global economic activity. According to the IMF, global growth is expected to fall to 2.8 percent in 2025 and 3 percent in 2026.

“For India, the growth forecast appears more stable at 6.2 percent in FY25 (6.3 percent for FY26), bolstered by private consumption, especially in rural areas, although this figure is 30 basis points lower than the previous estimate due to heightened trade tensions and global uncertainty,” the report disclosed.