Is India's GDP Growth on Track to Hit 6.8% in Q4?
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Synopsis
India's economy is projected to grow at 6.8% in Q4 FY25, driven by strong agricultural and construction sectors. With a healthy consumption outlook and improving rural demand, the future looks bright despite challenges. Discover what these projections mean for India's economic landscape.
Key Takeaways
- India's GDP growth projected at 6.8% for Q4 FY25.
- Overall FY25 growth expected at 6.3%.
- Strong performance in agriculture and construction sectors.
- Rural demand is crucial for sustaining recovery.
- Global uncertainties remain a concern.
New Delhi, May 23 (NationPress) India’s GDP growth for the fourth quarter is anticipated to reach 6.8 percent, resulting in an overall growth of 6.3 percent for FY25. This optimistic projection is bolstered by a robust performance in sectors such as agriculture, hotels, transport, and construction, as highlighted in a recent report.
The report from CareEdge Ratings, titled ‘The Economic Meter and GDP Preview for Q4FY25,’ suggests that while overall consumption is expected to remain strong, the varying dynamics of urban demand warrant careful observation.
“A significant surge in central capex disbursement towards the conclusion of Q3 is likely to enhance investment growth in Q4,” the report noted.
Looking ahead, elements like revitalizing rural demand, reduced tax burdens, cuts in policy rates, decreasing inflation, and positive expectations regarding the monsoon are anticipated to foster an increase in economic activity.
For a meaningful rise in corporate capex, a continuous recovery in consumption is essential. However, global uncertainties could pose challenges. The report forecasts a GDP growth of 6.2 percent for FY26.
Agricultural performance has remained vibrant, with Rabi sowing of food grains exceeding last year's levels by 2 percent. Additionally, domestic tractor sales surged by 23.4 percent YoY in Q4 FY25, surpassing the 13.5 percent YoY growth recorded in Q3.
Moreover, fertiliser sales rose by 5.4 percent during January-February 2025, a significant increase compared to just 0.4 percent growth in Q3 FY25.
Domestic air passenger traffic also experienced a notable increase, growing by 12 percent YoY in Q4 FY25, up from 11.4 percent YoY in Q3. The IIP mining sector expanded by 2.1 percent in Q4 FY25, compared to 1.8 percent in Q3.
“Despite a 4 percent contraction in central capex during January-February 2025, substantial spending towards the end of Q3 FY25 is expected to bolster construction activities in Q4, given the typical delay in its effects,” the report stated.
Additionally, IIP infrastructure and construction goods demonstrated progress in Q4 FY25, increasing by 7.6 percent, surpassing the 7 percent growth in Q3. However, highway construction and bitumen consumption saw declines of 8.4 percent YoY and 3.8 percent YoY, respectively, in Q4, the report indicated.
Point of View
It is crucial to recognize the positive indicators in India's economic landscape while remaining aware of the global uncertainties that pose risks. Our commitment is to provide an unbiased perspective, shedding light on the continuous growth of key sectors and the potential for a robust recovery.
NationPress
08/06/2025
Frequently Asked Questions
What is the projected GDP growth for India in Q4 FY25?
India's GDP growth for Q4 FY25 is projected at 6.8%, contributing to an overall growth of 6.3% for FY25.
Which sectors are driving India's GDP growth?
Key sectors driving India's GDP growth include agriculture, hotels, transport, and construction.
What factors are expected to support economic activity in India?
Factors such as recovering rural demand, lower tax burdens, policy rate cuts, and falling inflation are expected to support economic activity.
What challenges does India face in terms of economic growth?
Global uncertainties may pose challenges to India's economic growth outlook.
What is the expected GDP growth for FY26?
The report forecasts a GDP growth of 6.2% for FY26.
