India’s economy is likely to grow between 6.2% and 6.3% in the third quarter of the 2024-25 financial year, according to an estimate by SBI Research. The forecast is based on strong economic indicators, despite global uncertainties and supply chain challenges.
Strong Economic Momentum
The projection comes from SBI Research’s ‘Nowcasting Model,’ which tracks 36 high-frequency indicators to assess economic performance. Based on current trends, the full-year GDP growth is expected to be around 6.3%, provided there are no major revisions to previous data by the National Statistical Office (NSO). The official GDP figures for Q3 are set to be released on February 28.
Economic indicators have shown improvement, with 74% of them accelerating in the third quarter, compared to 71% in the previous quarter. This suggests sustained momentum across key sectors.
Rural Economy and Capital Expenditure on the Rise
Agricultural wages have remained steady, supporting rural income stability. Meanwhile, domestic tractor sales and rabi crop sowing have picked up pace, further strengthening the rural economy.
Government spending, particularly at the state level, has also contributed to economic growth. Capital expenditure (CAPEX) has seen an uptick in the third quarter, signaling improved investment activity.
India Among Fastest-Growing Economies
Despite global challenges, India remains one of the world’s fastest-growing economies. The International Monetary Fund (IMF) has projected India’s GDP growth at 6.5% for both FY25 and FY26, citing strong domestic demand and effective policy measures by the government.
Rural demand continues to be a key driver of growth, supported by stable wage levels and a robust agricultural sector. Additionally, surveys conducted by the Reserve Bank of India (RBI) indicate growing consumer optimism regarding economic conditions, inflation trends, and global developments. This positive sentiment could support long-term, sustainable growth.
Possible GDP Revisions on February 28
SBI Research has highlighted the possibility of the NSO revising GDP estimates for the first and second quarters when it releases the second revised estimates for FY25 on February 28. However, unless there are significant changes, the full-year growth projection is expected to remain around 6.3%.
India’s economic performance in the third quarter reflects resilience and strong domestic fundamentals, reinforcing its position as one of the world’s fastest-growing economies.
