India's Economic Growth Demonstrates Resilience Amid Global Challenges
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Synopsis
Despite geopolitical headwinds, India's GDP growth of 6.2% in Q3 FY 2024-25 showcases its resilience and effective policy measures, driven by strong agricultural performance and an expanding tertiary sector.
Key Takeaways
- India's GDP growth is at 6.2% in Q3 FY 2024-25.
- Agriculture sector grew by 5.6%.
- Tertiary sector showed 7.4% growth.
- Private consumption increased by 6.9%.
- Construction sector grew by 7%.
New Delhi, Feb 28 (NationPress) Despite facing geopolitical challenges, India's economy has shown remarkable resilience with a growth rate of 6.2 percent in Q3 FY 2024-25, as highlighted by industry experts and associations on Friday.
This growth is primarily fueled by robust performance in the agriculture and allied sectors, which recorded a growth rate of 5.6 percent in Q3.
According to Hemant Jain, President of PHDCCI, "This recovery is anticipated to enhance farmers' earnings and further drive agricultural productivity and rural development."
The tertiary sector has become a vital driver of growth, exhibiting an impressive 7.4 percent growth in Q3 FY25. Key services such as trade, hotels, transport, communication, and broadcasting experienced significant growth of 6.7 percent, Jain noted.
Private final consumption expenditure rose by 6.9 percent in Q3, indicating a consistent rise in consumer spending and a solid demand trajectory. The manufacturing sector demonstrated steady growth of 3.5 percent, showcasing the ongoing strength of India’s manufacturing reforms.
The construction sector remains a crucial pillar of India’s economic expansion, showing consistent growth of 7 percent in Q3.
Madhavi Arora, Chief Economist at Emkay Global Financial Services, stated that significant upward revisions to previous years and quarters have made GDP forecasting quite dynamic.
Aditi Nayar, Chief Economist at ICRA, observed that the sequential increase was driven by a rise in both private and government consumption, alongside a reduced drag from net exports.
"Currently, we predict Q4 GDP growth to be between 6.5-6.9 percent, driven by government expenditure and rural consumption. For the entire FY2025, we anticipate GDP growth at 6.3 percent," she mentioned.
India’s FY24 GDP was revised upward by 100 basis points to 9.2 percent YoY, representing the highest growth in 12 years, excluding the post-Covid recovery period.
The 6.2 percent GDP growth in Q3 FY25 indicates a resilient and expanding economy, bolstered by high consumption, increased government spending, and rising exports.
"Looking forward, investment activity is projected to improve, assuming that lower interest rates are implemented, which should promote job creation. Additionally, if recent tax relief for the middle-income group stimulates further consumption, we can expect sustained growth momentum in the upcoming quarters," stated Mahendra Patil, Founder and Managing Partner of MP Financial Advisory Services.
