SBI has come up with a report on Wednesday, 19 February 2025, for the GDP growth in India for the third quarter of FY25. It has projected India’s Q3 GDP growth to be between 6.2% to 6.3% primarily driven by an upsurge in capital expenditures (capex) and higher demand. It has also been mentioned that the overall financial performance of the country has improved which has driven this growth in the gross domestic product. It has also been mentioned that the sluggishness noticed during the second quarter of the fiscal was temporary and the annual GDP growth FY25 estimates will stay at 6.3% as it was as no major change has been seen in the data by the National Statistical Office of previous quarters as well.
When will India’s Q3 GDP growth data be released?
The official GDP data for the third quarter can be expected on 28 February. In this SBI report, the economic indicators are positive, and positive acceleration has risen to 74% compared to 71% in the previous quarter.
This has been pivoted by strong rural demand which has been keeping the economy stable as well, and supporting different sectors and their growth momentum. Within the rural economy, factors that are crucial to this growth include constant growth in the wages in the rural agricultural sector, an increase in the sale of domestic tractors, and a rise in the sowing of rabi crops.
On the other hand, capex trends are improving which has also been playing an important role in India’s GDP growth rate surge. Though many states have reduced the capex in the budget estimates, the capex growth in Q3 was inevitable and the future also holds huge growth prospects.
India Inc.’s Positive Signals
The SBI report also states that the manufacturing sector of the country as depicted by the Index of Industrial Production (IIP) surged 3.3% during Q2FY25 while in Q3FY25 it grew 4.3% which was a significant rise. The corporate GVA also witnessed QoQ improvement and the EBITDA rose 44 bps in this Q3FY25 after two quarters.
It is interesting to see how India continues to grow and has become one of the fastest-growing nations in the world even when the global economy has slowed down. The IMF has projected India’s growth to be at around 6.5% in FY25 as well as in FY26 stating factors such as government policy initiatives, strong investment in the infrastructure of the economy, and of course the notable surge in the domestic demand.
Wrapping up
Now all eyes are on the official GDP report which will be released end of this month. The growth in the capex and rural economy is inevitable though. It will be interesting to see the official data and how the market reacts to the same.
Source: CNBC TV18
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