New Delhi, Jan 2 (NationPress) As we usher in 2025 amidst rising global uncertainties linked to the upcoming inauguration of US President-elect Donald Trump, India is positioned notably stronger. High frequency indicators indicate a marked increase in growth during the third quarter of the current fiscal year (Q3 FY25), according to a report released on Thursday.

According to the Bank of Baroda (BoB) report, key metrics such as GST collections, services purchasing managers' index (PMI), air passenger growth, and vehicle registrations have all shown significant improvements in Q3 compared to Q2.

In contrast, China is seeing a gradual expansion in its manufacturing sector, while enhancing domestic consumption and revitalizing the real estate market remains challenging for its administration.

The US economy exhibits mixed growth signals. Although the labor market shows signs of softening and manufacturing activity remains weak, retail sales, pending home sales, and the service sector are performing well. Meanwhile, in Europe, manufacturing activity is yet to gain momentum, although the service sector is gradually recovering.

In India, the current account deficit (CAD) has decreased to 1.2% of GDP in Q2 FY25 from 1.3% in Q2 FY24.

“While the trade deficit increased, strong services exports and sustained remittance flows contributed to the reduced CAD. Our year-end market analysis indicates that both Sensex and Nifty 50 rose by 8.7% and 9% respectively in CY24, with the Sensex reaching an all-time high of over 85,500 this year,” stated Sonal Badhan, economist at Bank of Baroda.

Prominent sectors such as real estate, consumer durables, and IT emerged as top performers in CY24. Although the Indian rupee depreciated by 2.8% in 2024, it remains one of the stronger currencies among its counterparts.

Market dynamics experienced reduced yield pressure, bolstering demand as bonds were included in the JP Morgan emerging market index, Bloomberg, and FTSE Russell.

The report highlights that high frequency indicators indicate substantial improvement for the period of October to December 2024. GST collections surged by 8.3% (YoY) in Q3, totaling Rs 5.5 lakh crore, up from Rs 5.3 lakh crore in Q2, signaling enhanced consumption patterns.

Additionally, driven by festive demand, indicators of urban consumption have also seen enhancements. Air passenger traffic grew by 11.6% in Q3, compared to a 7.8% increase in Q2. The services PMI averaged 59.2 in Q3, up from 58.1 during the same timeframe last year.

“We anticipate quarterly corporate results to reflect improved performance in Q3,” Badhan added.

Regarding central bank actions, the report forecasts a growth recovery in H2 FY25 with easing inflation, suggesting a potential rate cut of 25 basis points in February 2025, with a total easing of 50-75 basis points expected in the current cycle.

Moreover, with an anticipated rise in government expenditure and improvements in both government and private investments in H2, the industrial production index (IIP) growth is projected to significantly outperform H1 FY25, as noted in the report.