Informist Poll
After Jul-Sept shock, GDP growth seen rising to 6.4% Oct-Dec
This story was originally published at 14:31 IST on 21 February 2025
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NEW DELHI – India's GDP growth is likely to have rebounded quickly in Oct-Dec from a seven-quarter low of 5.4% in Jul-Sept, driven by an improvement in government spending and rural demand. According to a poll of 13 economists by Informist, GDP growth is expected to have risen to 6.4% in the final quarter of 2024. While this would be a full percentage point higher than the previous quarter, it would be more than 200 basis points lower than the year-ago growth rate of 8.6%.
The statistics ministry will release GDP data for Oct-Dec at 1600 IST on Feb. 28. It will also release the second advance estimate of GDP for 2024-25 (Apr-Mar) as a whole, the first revised estimate for FY24, and the second revised estimate for FY23. As per latest data, the first advance estimate of GDP growth in FY25 is 6.4%, the lowest in four years. The provisional estimate of FY24 growth is 8.2%, while the first revised estimate for FY23 growth is 7.0%.
"Rural consumption indicators are showing visible signs of improvement in Q3FY25 (Oct-Dec) with rise in FMCG (fast moving consumer goods) volume sales growth to 9.9% from 5.5% in H1FY25 (Neilsen IQ)," noted Gaura Sen Gupta, chief economist at IDFC FIRST Bank, adding that other indicators such as domestic tractor sales and a rise in diesel consumption also signalled improvement in rural consumption. Urban demand, too, seems to have picked up due to festival season demand after a bad Jul-Sept, although the recovery was more subdued and uneven than in rural areas, with NielsenIQ estimating 5% growth in Oct-Dec, up from 2.6% in Jul-Sept. On the other hand, Nomura economists think consumption indicators for Oct-Dec have been "mixed" despite the boost from festivals in Oct-Nov and weddings in December.
Government spending, however, rose sharply in the final quarter of 2024. While total central government expenditure was up 20% year-on-year in Oct-Dec compared to a 7% increase in Jul-Sept, the Centre's capital expenditure jumped 48?ter a muted 10% growth in the second quarter. States too spent at a faster clip in Oct-Dec, with Aditi Nayar, ICRA's chief economist, saying the increase in the aggregate capital outlay and net lending of 24 state governments was 9.9%, up from 7.0% in Jul-Sept.
Meanwhile, industrial growth as per the Index of Industrial Production, rose to 4.0% in Oct-Dec from 2.7% in Jul-Sept. Services sector growth is expected to be broadly in line with 7.1% in Jul-Sept. According to Soumya Kanti Ghosh, State Bank of India's group chief economic adviser, growth in corporate gross value added in Oct-Dec was 9.55%, up from 6.64% in Jul-Sept, as per the latest quarterly results of more than 4,000 listed companies. Economists polled by Informist see GVA growth in Oct-Dec coming in at 6.3%.
Finally, agriculture is seen growing at a faster rate of 3.5-4.5% compared to 3.5% in Jul-Sept and 0.4% in Oct-Dec 2023, thanks to a "healthy increase in kharif foodgrain output as well as a muted base", ICRA's Nayar said.
Despite the rebound in growth in Oct-Dec, the second advance estimate of growth in FY25 as a whole is expected to come in at 6.2%, 20 bps lower than the first advance estimate. As such, the Reserve Bank of India's Monetary Policy Committee is widely expected to reduce the repo rate by 25 bps again in April after doing so for the first time in nearly five years earlier this month.
The following table details the GDP growth estimates of economists:
| ORGANISATION | OCT-DEC GDP GROWTH ESTIMATE |
| Nirmal Bang Institutional Equities | 5.9% |
| IDFC FIRST Bank | 6.0% |
| HSBC | 6.0% |
| Nomura | 5.8% |
| State Bank of India | 6.2-6.3% |
| CareEdge Ratings | 6.3% |
| ICRA | 6.4% |
| Barclays | 6.4% |
| Kotak Mahindra Bank | 6.4% |
| India Ratings & Research | 6.5% |
| QuantEco Research | 6.5% |
| Bank of Baroda | 6.6% |
| Acuite Ratings | 6.7% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Siddharth Upasani
Edited by Avishek Dutta
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