New Delhi: SBI Research in its latest report projected 6.3 per cent GDP growth in FY25, down from its previous forecast of 6.6 per cent. The research unit of the country’s largest lender said the average growth in the first 2 quarters was 6.05 per cent. The Reserve Bank of India on Friday revised the FY25 growth forecast to 6.6 per cent from 7.2 per cent earlier. RBI governor Shaktikanta Das said inflation is likely to remain a pain point until the end of the current quarter.
Is RBI GDP forecast revision cause for concern?
Earlier, the central had raised its FY25 GDP growth forecast to 7.2 per cent from 7 per cent. The downward revision is nothing new since RBI also revised GDP projections in FY22 and FY23 by nearly 90 bps, said Soumya Kanit Ghosh, group CEA at SBI and member of the 16ht Finance Commission.
Does RBI’s CRR rate cut make sense?
Discussing the CRR rate cut by 50 bps to 4 per cent, SBI Research said the move is unlikely to translate into a change in the rates of deposits and lending rates. To be sure, this is expected to impact margins in a positive manner. SBI Research said liquidity in India’s banking sector was soaked up by the introduction of a Rs 3.70 lakh crore SNA Sparsh scheme.
The report states that RBI’s liquidity management will face challenges from nearly Rs 7.5 trillion worth of IFMIS flows. IFMIS or Integrated Financial Management and Information System is used by central ministries and state treasuries. This bypasses commercial banks, posing a challenge to liquidity. The RBI should slash CRR further to 3 per cent, unlocking funds worth Rs 2.32 lakh crore, said SBI Research in its report.
What was RBI’s inflation guidance
The Reserve Bank of India revised its Q3 inflation guidance to 5.7 per cent from 4.8 per cent. The Q4 GDP outlook rose to 4.5 per cent from 4.2 per cent earlier. Inflation in Q2FY26 is likely to touch 4 per cent, according to RBI’s forecast.
SBI Research in its latest report stated that the RBI’s GDP growth forecast revision is unlikely to be a cause for concern since it revised the forecast in FY22 and FY23 by 90 basis points. Economy Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
