India Economy Watch – Expect Real GDP Growth At 5.0-5.5% In H2 FY25: Motilal Oswal Motilal Oswal Financial Services NDTV Profit

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

India’s real gross domestic product growth slowed unexpectedly and suddenly to 5.4% YoY in Q2 FY25 versus the RBI’s projection of 6.7%. In our previous QEO, we projected a growth of 6.2% in 2Q (versus market consensus of ~7% then) and 5.7% in H2 FY25.

Considering Q2 data and October 2024 data, we slightly lower our H2 FY25 growth forecasts to 5.0-5.5% in H2 FY25, implying full-year growth at 5.8% (versus 6.1% expected earlier). We keep our real GDP growth forecasts for FY26/FY27 unchanged at 6.2-6.3%.

At the same time, we raise our FY25 headline retail inflation forecast to 5.1% YoY (from 4.5% earlier), as we expect a high inflation print in Q4 FY25 (unlike the RBI and the market consensus).

Although weak growth will push the RBI to cut rates in Feb-25, the combination of weak growth and high inflation in H2 FY25 will certainly make the task difficult for the RBI.

Lastly, we expect the Center’s capital spending to be much lower than the budgeted Rs 11.1 trillion; however, higher revenue spending and weak nominal GDP growth will likely keep the deficit at 4.9% of GDP in FY25.

Moreover, with lower RBI dividends, and thus, lower receipts next year, a deficit of 4.5% of GDP will mean subdued growth in total spending by the Center, keeping overall economic growth subdued.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

. Read more on Research Reports by NDTV Profit.In this report, Motilal Oswal provides an updated macroeconomic forecasts for India and
discuss the three key themes that are likely to play out in CY24/FY25.  Read MoreResearch Reports 

​NDTV Profit