The economy is seen to have performed marginally better in the fourth quarter of 2024-25 but the full fiscal GDP growth is seen to be lower than the forecast 6.5%.
Most experts estimate the economy to have grown by anywhere between 6.4% and 7.2% in the January to March 2025 quarter and expect GDP to have expanded by 6.3% to 6.4% in FY25. The estimates are lower than the second official estimate by the National Statistical Office of 6.5% for FY25 with an implicit forecast of 7.6% for the fourth quarter of the fiscal.
As per the NSO, the economy grew by 6.5% in the first quarter of 2024-25, 5.8% in the second quarter and 6.2% in the third quarter of the fiscal.
The NSO will release its official estimates of the fourth quarter GDP growth as well of the full fiscal 2024-25 on May 30.
Analysts expect the farm sector to have performed well in the fourth quarter of the fiscal while manufacturing is seen to have slowed down. Private consumption as well as gross fixed capital formation is also seen to have been slower.
Barclays expects GDP growth in the fourth quarter of the fiscal at 7.2% due to a sharp rise in net indirect tax and real GDP growth at 6.4%. “We think the agriculture sector growth is likely to show improvement y/y, as suggested by advance estimates of crop production – which show record high wheat production. Accordingly, we estimate agriculture GVA growth at 5.8% y/y in Q4, accelerating from 5.6% in Q3,” said Aastha Gudwani, India Chief Economist, Barclays.
Within the industry sector, the agency expects that mining and electricity generation growth added modestly to headline growth while manufacturing GVA growth (18% of total GVA) likely slowed in the January-March quarter.
Nomura has forecast GDP growth at 6.7% in the fourth quarter of the fiscal. “On the supply side, robust Rabi (winter) crop output should ensure continued strength in the agricultural sector. Industrial growth is likely to be weaker, but we expect a broad-based pick-up in services growth. On the demand side, we expect a moderation in growth of private consumption, fixed investment and exports, but a sharper contraction in import growth should mean a positive contribution from net exports to overall GDP growth,” it said in a note. For FY25, it has estimated GDP growth at 6.2% and for FY26 at 5.8%.
ICRA has projected the year-on-year expansion of the GDP to rise to 6.9% in the fourth quarter FY2025 and full year GDP growth at 6.3%. “Both private consumption and trends for investment activity were uneven in Q4 FY2025, with the latter partly owing to tariff-related uncertainty. Services sector exports continued to show double-digit growth, while merchandise exports contracted in YoY terms in the fourth quarter of FY2025 after expanding in the third quarter of the fiscal,” said Aditi Nayar, Chief Economist, Head-Research & Outreach, ICRA.
Meanwhile, SBI Ecowrap in a report said it expects GDP growth for the fourth quarter of the fiscal at around 6.4-6.5% and FY25 GDP to stand at 6.3%.
