More Stories

Informist, Wednesday, Feb. 19, 2025

 

--RBI report: Data shows pick-up in econ momentum Oct-Mar, likely to sustain

--CONTEXT: Comments from RBI's monthly state of economy article

--RBI report: GDP nowcast for Jan-Mar placed at 6.6%

--RBI report:Urban demand to recover on inflation fall, income tax cut boost

 

NEW DELHI – The Indian economy is seen growing by 6.6% in the final quarter of 2024-25 (Apr-Mar), according to Reserve Bank of India staff's economic activity index, indicating faster growth in the second half of the financial year.

 

"The Indian economy is regaining its growth momentum driven by recovery in consumption demand and overall investment," RBI staff said in their regular State of the Economy article on Wednesday. "The economic activity index, constructed by extracting the common trend underlying twenty-seven high frequency indicators, indicates that activity sustained its pace in January and the GDP nowcast for Q4:2024-25 (Jan-Mar) is placed at 6.6%," it added.

 

The monthly State of the Economy article is not the RBI's official view.

 

The RBI staff's prediction of 6.6% GDP growth in Jan-Mar is a huge downgrade from the central bank's last official forecast of 7.2%, made in early December when it slashed its full-year forecast by 60 basis points to 6.6?ys after the disastrous Jul-Sept figure that showed economic growth plummeted to a seven-quarter low of 5.4%. Since then, the statistics ministry has said in its first advance estimate that GDP growth in FY25 is seen slipping to a four-year low of 6.4%.

 

The statistics ministry will release GDP data for Oct-Dec at the end of February. While the RBI stopped providing official GDP growth forecasts following the release of the first advance estimate in early January, economists from outside the central bank see growth in the penultimate quarter of FY25 rising to around 6.5%.

 

According to the article, high-frequency data suggests a sequential pick-up in momentum of economic activity during the second half of FY25 "which is likely to sustain moving forward". As per latest data, India's GDP grew by a mere 6.0% in the first six months of FY25, with the first advance estimate implying a growth rate of 6.7% for the second half of the year.

 

"...economic activity momentum is poised to be sustained, strong rural demand is expected to receive a further fillip from the robust performance of the agriculture sector. Urban demand is also poised for a recovery, tracking decline in inflation as well as a boost to disposable incomes from the sizeable income tax relief announced in the Union Budget 2025-26," the article added.  End

 

Reported by Siddharth Upasani

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.