Economists of the public sector and the country’s largest bank, State Bank of India (SBI), have projected the country’s gross domestic product (GDP) growth rate to decline to 7.1 percent in the June quarter of the current financial year. In this way, SBI has also joined the analysts who have projected a decline in the real growth rate in the June quarter. According to the news of Bhasha, SBI economists said in a report that the growth of gross value added (GVA) in the April-June quarter of the current financial year will fall below seven percent compared to last year to 6.7-6.8 percent.

Real GDP growth was 7.8 percent in the March quarter
According to the news, economists said that according to our nowcasting model, the estimated GDP growth for the first quarter of FY 2024-25 will be 7.0-7.1 percent, and gross value added will be 6.7-6.8 percent. It is worth noting that the real GDP growth in the June quarter last year and the March quarter before that was 7.8 percent. Many analysts are pointing to a slowdown in economic activity in the June quarter, which is mainly due to the slowdown in the manufacturing sector and low government spending due to the general elections. The report also said that given the uncertain global growth scenario and softening of inflation, there is scope for easing monetary policy.

Growth forecast based on 41 key indicators

SBI economists said that their growth forecast is based on 41 key indicators. They have mentioned a decrease in sales growth and increased employee costs for manufacturing companies. It said that in this background, profit margins have declined and this will slow down the pace of the manufacturing sector. The report says that if banking, finance and insurance companies are excluded, then in the first quarter of the current financial year, companies have registered a growth of only five percent in revenue. At the same time, their operating profit has decreased by one percent.

Retained at 7.5% for FY2024-25
However, SBI economists have retained their growth forecast of 7.5 per cent for FY2024-25. This is higher than the Reserve Bank of India’s growth forecast of 7.2 per cent. The report says the global economic scenario remains uncertain. A possible slowdown in major economies and weakness in labour markets amid continued geopolitical pressures could weigh on prospects. The positive side for India is that the southwest monsoon has gained momentum since early July, reducing the rain deficit.