Even after enduring sustained global disruptions, the Indian economy continues to stay strong and is slated to record a GDP growth rate of around 6.4–6.5% in Q4 of FY25, a new report published by State Bank of India (SBI) on Wednesday suggests.
The projection is based on SBI’s 'Nowcasting Model,' developed by its Economic Research Department. This statistical tool leverages 36 high-frequency indicators spanning industrial activity, services, and global economic trends.
The model employs a dynamic factor approach to distill a common underlying trend from data spanning Q4 FY13 to Q2 FY23.
GDP growth for Q4 FY25 should be in the range of 6.4–6.5%, as our model suggests," stated Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor, SBI.
Based on no significant revisions in GDP numbers of the first three quarters, SBI predicts India's fiscal year FY25 growth coming in at 6.3%.
The report also pointed to good news from the India Meteorological Department (IMD), which anticipates the southwest monsoon reaching Kerala in the next four to five days—premature by the traditional June 1 start. If it happens, it will be the earliest onset of monsoon over the Indian landmass since 2009, when it started on May 23.
With a positive monsoon forecast, India is projecting a ambitious foodgrain output goal of 354.64 million tonnes for the July-started 2025–26 crop year. This comes after the 2024–25 goal of 341.55 million tonnes, out of which 332.3 million tonnes has been reached till now, according to the report.
SBI's analysis also borrows from consumer surveys showing decelerating inflation expectations. This trend is supporting higher discretionary expenditure and thus demand-led growth. The report, though, noted that consumer confidence overall has stayed steady, implying ongoing skepticism regarding global economic growth and warning against caution in near-term growth expectations.
Internationally, the report highlighted increasing trade tensions and increased policy uncertainty as major risks. The International Monetary Fund (IMF) has estimated that global growth will fall to 2.8% in 2025 and improve modestly to 3% in 2026.
Conversely, India's growth path seems more stable. SBI has estimated GDP growth at 6.2% in FY25 and 6.3% in FY26. While remaining robust, these are about 30 basis points below earlier projections mainly on account of growing anxiety about rising global trade tensions and geopolitical uncertainty.
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