New Delhi: India’s gross domestic product (GDP) likely grew at a relatively accelerated pace of 6.4% in the October-December quarter (Q3) of the current financial year 2024-25 from seven-quarter low of 5.4% in the previous quarter on the back of enhanced government spending, research and rating firm ICRA said in a report on Tuesday.
Further, the growth in the gross value added (GVA) is estimated to record a relatively broad-based improvement to 6.6% in Q3 from 5.6% in Q2 FY2025, driven by the industrial, services and agricultural sectors.
“On a sombre note, the GDP and GVA growth in Q3 FY2025 is foreseen to continue to trail the NSO’s initial growth estimates for Q1 FY2025 (+6.7% and +6.8%, respectively), which had seen some sectors affected by the Parliamentary elections, the Model Code of Conduct, and also the heat wave in some states,” ICRA said.
National Statistical Office (NSO) will release the official GDP growth estimate for Q3FY25 on February 28, 2025.
Aditi Nayar, Chief Economist, Head-Research & Outreach, ICRA said that India’s economic performance in Q3FY25 benefitted from a sharp ramp-up in aggregate government spending (Centre and state) on capital and revenue expenditure, high growth in services exports, a turnaround in merchandise exports and healthy output of major kharif crops among others.
“Some consumer-focused sectors saw a pick-up during the festive season, even as urban consumer sentiment dipped slightly, and other sectors such as mining and electricity saw an improvement after weather-related challenges in the previous quarter. Overall, while we expect the pace of GDP and the GVA expansion to rise in Q3 FY2025 relative to the seven-quarter low prints for the previous quarter, marking an upturn, the performance may remain inferior to the NSO’s initial estimates for Q1 FY2025,” she said.
ICRA has projected the industrial GVA growth to record a broad-based pick-up to 6.2% in Q3 FY2025 from 3.6% in Q2 FY2025, led by manufacturing (to +5.0% from +2.2%), construction (to +9.5% from +7.7%), electricity (to +5.0% from +3.3%), and mining and quarrying (to +2.5% from -0.1%), with the latter two sub-sectors partly benefitting from the easing in rainfall.
Logging its slowest growth in four years, the Indian economy is expected to grow at 6.4% in the current fiscal year, as per First Advance Estimate released by NSO.
