Indian economy may grow at 7.1% in the first quarter, claims SBI Research

A few days before the government releases the official numbers, a report by SBI Research pegged that the Indian economy may grow at 7.0 to 7.1 percent in Q1 of 2024-25, PTI reported.

The first quarter GDP numbers will be out this Friday. The Reserve Bank of India has pegged the GDP growth at 7.2% in 2024-25 in its latest monetary policy meeting. According to the RBI, the growth rate may remain at 7.1 percent in the first quarter, 7.2 in the second, 7.3 in the third, and 7.2 percent in the fourth.

According to the latest SBI Research Ecowrap prepared by Group Chief Economic Advisor Soumya Kanti Ghosh, despite rumblings from the supply chain pressures due to the rise in freight and container costs of globally traded merchandise and overall semiconductor shortages, it remains resilient. According to SBI Research, the southwest monsoon gained momentum from early July, allaying fears of a slowdown in the economy.

As of August 25, 2024, the cumulative rainfall was 5% above the long-term average (LPA), while it was 7% below the LPA during the same period last year. Due to above-average rainfall, as of August 20, 2024, the total Kharif sowing area reached 103.1 million hectares (94% of the full-season normal area).

This is two percent more than the same period last year. India's GDP grew by an impressive 8.2 percent during the financial year 2023-24. The Indian economy remains the fastest-growing major economy. According to official data, the economy grew by 7.2 percent in 2022-23 and 8.7 percent in 2021-22.

Meanwhile, several global rating agencies and multilateral organizations have also revised their forecasts of India's growth rate. In July, the International Monetary Fund (IMF) raised India's growth projections for 2024 from 6.8 percent to 7 percent, cementing India's position as the fastest-growing economy among emerging markets and developing economies.