However, this growth forecast comes with a downward bias.
The first quarter GDP data is scheduled for release on Friday.
The Reserve Bank of India, in its latest monetary policy meeting, projected GDP growth for 2024-25 at 7.2 per cent, with growth for Q1 expected at 7.1 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent, and Q4 at 7.2 per cent.
SBI Research, in its latest Ecowrap report authored by Group Chief Economic Adviser Soumya Kanti Ghosh, noted that the Indian economy remained resilient despite challenges from supply chain pressures, including rising global freight and container costs, and semiconductor shortages.
On a positive note, the southwest monsoon picked up from early July, reducing the deficit.As of August 25, 2024, cumulative rainfall was 5 per cent above the long-period average, compared to 7 per cent below the LPA during the same period last year.As a result, 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.
India’s GDP grew by an impressive 8.2 per cent during the financial year 2023-24, continuing to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, according to official data.
Many global rating agencies and multilateral organisations have also revised their growth forecasts for India upwards.
In July, the International Monetary Fund (IMF) raised India’s growth projections for 2024 from 6.8 per cent to 7 per cent, reinforcing the country’s status as the fastest-growing economy among emerging markets and developing economies.
The Economic Survey tabled in Parliament last month “conservatively” projected India’s real GDP growth at 6.5-7 per cent for 2024-25, acknowledging that market expectations are higher. Real GDP growth is the reported economic growth adjusted for inflation.
On the global economy, the SBI report stated that the economic growth outlook remains uncertain, but the softening of inflation has created room for monetary policy easing.
At the closely watched Jackson Hole annual symposium, US Federal Reserve Chair Jerome Powell expressed further confidence in imminent policy easing. Powell indicated that it might be time for the US central bank to reduce interest rates as inflation is aligning with the target.
Addressing the much-anticipated Jackson Hole Symposium on Friday, Powell stated, “The time has come for policy to adjust,” but stopped short of hinting at the extent of the interest rate cut.