New Delhi
Despite the global turmoil and seasonal effects, the Indian economy remains strong to a great extent and is forecast to be 6.4-6.5 percent in the fourth quarter of FY 2025. This information has been released in a report by SBI. To statistically estimate GDP, the Economic Research Department of State Bank of India has created a ‘Nucasting Model’ with 36 high frequency indicators associated with Industry Activity, Service Activity and Global Economy. The model uses a dynamic factor model to estimate the common, representative or latent factor of all high-priced indicators from the fourth quarter of FY 2013 to the second quarter of FY 2023.
GDP is expected to be 6.3 percent in FY 2025
Dr. Soumya Kanti Ghosh, SBI’s Group Chief Economic Advisor, said, “According to our ‘Nucasting Model”, the estimated GDP growth rate for the fourth quarter of FY 2025 should come around 6.4-6.5 percent for the fourth quarter of 2025. ” Ghosh said that the upcoming data released from the NSO would not have any major revision in the first to third quarter estimate, we hope that GDP will be 6.3 percent in FY 2025.
The India Meteorological Department (IMD) has said that the South-West monsoon is likely to reach Kerala in the next four to five days before its normal beginning date of June 1. If the monsoon arrives in Kerala as per estimated, it will be recorded for early knocking on the mainland area of India since 2009.
The SBI report said, “India is targeting 354.64 million tonnes of food grains in the 2025-26 crop year starting from better monsoon rains. In the current 2024-25 crop year, the government targeted 341.55 million tonnes of food grains (so far).”
According to the IMF, global development is estimated to fall by 2.8 percent in 2025 and 3 percent in 2026. The report stated, “For India, the development approach is more stable at 6.2 percent in FY 2025, 6.3 percent for FY 2026, which is supported in private consumption, especially in rural areas, but this rate is 30 bps lower than earlier estimates due to high levels of business stress and global uncertainty.”
Morgan Stanley gave India’s growth rate 6.2 percent for FY 2026
Global Financial Services Sector Morgan Stanley increased its gross domestic product growth estimate for India at 6.2 percent for FY 2026 and 6.5 percent for FY 2027.
The company said that domestic demand trends would be the main driver of the country’s growth speed amid uncertainty on the external front. Earlier, the growth rate for FY 2026 was estimated to be 6.1 percent and 6.3 percent for FY 2027. Global brokerage said in his note, “We hope the growth will be strong due to the strength in domestic demand amid uncertainty from external factors.”
“Fiscal policy is likely to continue policy support through easy monetary policy with priority to capital expenditure. Expected to stay in a comfortable area of macro stability with strong buffer.”
In the case of domestic demand, brokerage hopes that the improvement in urban demand and strengthening the level of rural consumption will already improve consumption on a more wider basis.
“In terms of investment, we see that public and domestic capital expenditure is promoting growth, while we expect private corporate capital expenditure will gradually recover,” it said.
Morgan Stanley hopes that the headline inflation will remain gentle due to a decrease in food inflation and the boundary of main inflation.