ECONOMY
June quarter growth to slip amid subdued manufacturing, lower govt spending
- IBJ Bureau
- Aug 27, 2024
Economists at the country’s largest lender, State Bank of India (SBI) on Monday joined other watchers forecasting a slip in the economic growth and estimated India’s real Gross Domestic Product (GDP) growth to come in at 7.1 per cent for the June 2024 quarter.
The economists said that growth in Gross Value Added (GVA) would fall below 7 per cent to 6.7-6.8 per cent for the April-June 2024 period of this financial year when compared to that of the year-ago period.
“As per our ‘Nowcasting Model’, the forecasted GDP growth for Q1 FY25 would be 7.0-7.1 per cent, and GVA is at 6.7-6.8 per cent with a downward bias,” the economists said.
It can be noted that the real GDP growth had come at 7.8 per cent in the June quarter last year and the preceding March quarter. A slew of analysts have been pointing to a moderation in economic activity in the June quarter, mainly driven by softer manufacturing and lower government spending due to the general elections.
The report also said that given the uncertain global growth outlook and the softening inflation, there was a space for monetary policy easing.
The SBI economists said its growth estimates were based on 41 lead indicators and pointed to a moderation in sales growth and an inching up in staffing costs for manufacturing companies.
“Against this backdrop, profit margins have declined, and this will pull down manufacturing growth,” they added.
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