GDP growth in Q1 of FY25 seen in range of 7-7.1%, GVA within 6.7-6.8%: SBI Ecowrap

SBI Q1 growth: State Bank of India, India’s largest public sector bank, sees GDP growth in range of 7-7.1 per cent in first quarter of FY25. According to SBI economic research department, gross value ded is expected to be between 6.7-6.8 per cent in first quarter of FY25. On or hand, rating agencies like ICRA, and CareEdge have pegged India’s growth at 6 and 6.9 per cent respectively.  SBI's growth projection for Q1 of FY25 is in line with RBI’s growth projection of 7.1 per cent for Q1.

“ forecasted GDP growth for Q1 FY25 would be in range of 7.0-7.1 per cent, with a downward bias. However, GVA will be below 7.0% and may come in range of 6.7-6.8 per cent. global economic growth outlook remains uncertain, but softening inflation has me space for monetary policy easing,” Somyakanti Ghosh, Group Chief Economic visor, SBI, said.

According to SBI Ecowrap Report, SW monsoon picked up from early July, closing deficit. “As of August 25, 2024, cumulative rainfall was 5 per cent above LPA as against 7 per cent below LPA during same period last year. Consequently, as of August 20, 2024, total kharif sown area stood at 103.1 million hectares (94 per cent of full-season normal area), which is 2.0 per cent higher than corresponding period last year.”

report also highlighted top line and bottom line growth in Q1, and said that around 4,000 listed companies reported both topline and bottom line growth of around 9 per cent against Q1 of FY24. Throwing light on GVA, it said that corporate GVA grew by around 10.9 per cent in Q1 FY25 as compared to 17 per cent in Q4FY24 and 26 per cent in Q3 FY24. During Q1FY25, aggregate EBITDA margin also fell by around 100 bps to 14.97 in Q1FY25 for said set of ex-bfsi corporates.

Talking about global macro outlook, SBI's economic research department said that global economic outlook remains uncertain. “Persistent geopolitical tensions rekindled fears of a potential recession on signs of weaker than expected labour market outcomes in key economies and financial market volatility in response to monetary policy divergence to cast a show on prospects even as inflation moderated grudgingly across countries,” report ded furr.

momentum of global disinflation is slowing, however, warranting caution in easing monetary policy. Financial conditions have been accommodating despite upward drift in longer-term yields. On backdrop of Jackson Hole annual symposium, US Fed Chair expressed furr confidence in imminent policy easing, saying furr cooling in job market would be unwelcome and that inflation was within reach of US central bank's 2 per cent target.