GDP Figures Likely to Touch Between 6.3-6.5% in Q3

The Indian economy is expected to have grown between 6.3-6.5% in the December quarter (Q3FY25). However, one research firm sees growth at 5.8%. The government is set to release the quarterly report on February 28.

During Q3FY24, GDP came at 8.6%, but since then the economic indicator has been witnessing a downward trend as it slipped to a dismal 5.4% in Q2 FY24. The decline can be attributed to slower consumption, especially in rural areas.

The government is expecting to see some green shoots in the economy. With improving consumption and uptick in capex, GDP numbers are expected to touch at 6.5%, experts claim.

Care Edge said, “As per our model, real GDP growth for Q3 FY25 is expected at 6.3 per cent Globally, India remains the world’s fastest-growing major economy despite the recent moderation.”

DBS Group, in its research report, said that a catch-up in government capex spending, upbeat kharif crop output, and festive demand are a few of the factors that are potent in lifting Q3FY25 output.

It said, “This is counterweighed by an absence of pick-up in corporate profitability and service sector activity, signaled by slowing credit growth and moderation in GST collections.”

On the other hand, Nomura has a different opinion. “We expect GDP growth to disappoint in Q3 FY25 (October-December) at 5.8 per cent y-o-y, albeit up from 5.4 per cent in Q2 FY25, with GVA growth likely to rise to 6 per cent from 5.6 per cent,” the agency said.

The brokerage also expects consumption and government spending to pick up. It also foresees strong agricultural growth and stability in construction and ‘financial services, real estate and professional services’, and underwhelming trends in the ‘trade, hotels, transportation and communication’ sector.

Nomura added, “Our medium-term Nomura India Composite Leading Index (NICLI) still points to an ongoing cyclical growth slowdown. We forecast GDP growth of 6 per cent y-o-y in FY25 and 5.9 per cent in FY26.”

The monetary policy from the brokerage said, “we continue to expect 75bp of additional cuts, more than consensus (25-50bp more), to a terminal rate of 5.5 per cent by end- 2025, with the next cut in April.”