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

SBI Q1 growth: The State Bank of India, India’s largest public sector bank, sees GDP growth in the range of 7-7.1 per cent in the first quarter of FY25. According to the SBI economic research department, the gross value added is expected to be between 6.7-6.8 per cent in the first quarter of FY25. On the other 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.“The forecasted GDP growth for Q1 FY25 would be in the range of 7.0-7.1 per cent, with a downward bias. However, GVA will be below 7.0% and may come in the range of 6.7-6.8 per cent. The global economic growth outlook remains uncertain, but the softening inflation has made space for monetary policy easing,” Somyakanti Ghosh, Group Chief Economic Advisor, SBI, said.According to the SBI Ecowrap Report, SW monsoon picked up from early July, closing the deficit. “As of August 25, 2024, the cumulative rainfall was 5 per cent above the LPA as against 7 per cent below the LPA during the same period last year. Consequently, as of August 20, 2024, the total kharif sown area stood at 103.1 million hectares (94 per cent of the full-season normal area), which is 2.0 per cent higher than the corresponding period last year.”The report also highlighted the 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 the said set of ex-bfsi corporates.Talking about the global macro outlook, SBI's economic research department said that the 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 shadow on prospects even as inflation moderated grudgingly across countries,” the report added further.The momentum of global disinflation is slowing, however, warranting caution in easing monetary policy. Financial conditions have been accommodating despite the upward drift in longer-term yields. On the backdrop of the Jackson Hole annual symposium, the US Fed Chair expressed further confidence in imminent policy easing, saying further cooling in the job market would be unwelcome and that inflation was within reach of the US central bank's 2 per cent target.

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

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

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