NEW DELHI: SBI in its latest report has projected India’s GDP growth at 6.3 per cent for FY25, which is below RBI’s 6.6 per cent forecast. The first two quarters of FY25 show an average growth of 6.05 per cent.
“We believe that GDP growth for FY25 will be lower than the RBI’s estimate and we are pegging the GDP growth at 6.3 per cent for FY25,’ the report stated.
The report follows RBI’s announcement of reduction in real GDP growth projection from 7.2 per cent to 6.6 per cent during its recent MPC meeting, considering balanced economic risks.
This is the first time in five years when the central bank initially increased its growth estimate from 7.0 per cent to 7.2 per cent, before reducing it.
Earlier, the RBI adjustments followed consistent downward trend. Historical data shows that growth projections for FY22 and FY23 underwent reductions averaging 90 basis points.
Additionally, RBI has declared a reduction in cash reserve ratio (CRR ) by 50 basis points in two stages which is expected to provide Rs 1.16 lakh crore to the banking system, potentially addressing liquidity issues in upcoming months.
Meanwhile, the report mentions that while the CRR reduction may not directly influence deposit or lending rates, banks might see a slight improvement in net interest margins (NIM) by 3-4 bps.
The report indicates increased prudence in growth predictions considering global and domestic economic factors. While banks may receive modest advantages from the CRR reduction, the decreased GDP forecast emphasises the importance of ongoing economic monitoring.