SBI Research on Wednesday forecast India’s gross domestic product (GDP) growth for the fourth quarter of FY25 at 6.4–6.5%, citing a slight moderation in economic activity. The full-year FY25 GDP is projected to grow at 6.3%, assuming no significant revisions to the Q1-Q3 data by the National Statistics Office (NSO).

The projection is based on SBI Research’s proprietary ‘Nowcasting Model,’ which analyses 36 high-frequency indicators linked to consumption and demand across sectors.

“While current household inflation expectations have moderated, encouraging discretionary spending, consumer confidence remains largely unchanged. This indicates a degree of uncertainty among households regarding global developments and the broader economic outlook,” the research note said.

The report also pointed to mixed indicators across the economy. While rural agricultural wage growth has begun to moderate, domestic tractor sales—a key rural demand indicator—are also showing reduced momentum. Additionally, capex as a percentage of budget estimates is lower in most states in FY25 compared to FY24, the report added.

Growth in the Index of Industrial Production (IIP) for manufacturing decelerated from 4.1% in Q3 FY25 to 3.6% in Q4 FY25. The SBI Composite Index also indicated negative momentum during the same period.

Meanwhile, prospects for the agricultural sector received a boost with the India Meteorological Department (IMD) forecasting an early onset of the southwest monsoon. On Tuesday, the IMD said the monsoon is expected to reach Kerala within the next four to five days, ahead of the usual June 1 onset. If it arrives as anticipated, it will be the earliest monsoon onset since 2009.

The IMD’s first-stage long-range forecast predicts above-average rainfall for the June–September 2025 season. This forecast is supported by neutral El Niño–Southern Oscillation conditions, a neutral Indian Ocean Dipole, and below-normal snow cover in the northern hemisphere during early 2025. On the back of these developments, the government has set a target of 354.64 million tonnes for foodgrain production in the 2025-26 crop year starting July—up from 341.55 million tonnes in 2024-25. So far, 332.3 million tonnes have been harvested in the current year.

However, SBI Research cautioned that intensifying downside risks remain in the global economic environment. “Trade tensions are escalating, and global policy uncertainty remains extremely high,” the report noted, adding that the geopolitical risk indicator rose in early 2025 due to mounting trade tariffs and other barriers.

The International Monetary Fund (IMF) has projected global GDP growth to slow to 2.8% in 2025 and 3% in 2026.

Despite global headwinds, India’s economic outlook remains relatively resilient, with growth expected at 6.2% in FY25 and 6.3% in FY26. Still, this represents a downward revision of 30 basis points from earlier estimates, largely due to global uncertainty and rising trade friction.

On the corporate front, SBI Research noted that around 1,200 listed companies reported a revenue increase of 6% in Q4 FY25, with EBITDA and profit after tax (PAT) rising by 10% and 14%, respectively, compared to Q4 FY24. Excluding banking and financial services, nearly 1,000 companies reported 4% revenue growth and a robust 20% rise in PAT.