India Q3 GDP View | Indian economy likely grew by 6.2-6.3% in December quarter of FY25 on capex, demand revival: SBI

India Q3 GDP Growth: The State Bank of India (SBI) estimates that India's gross domestic product (GDP) grew 6.2-6.3 per cent in the December quarter of 2024-25 (Q3FY25). The official GDP data will be released on February 28, 2025. The SBI Research report, authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, stated that the July-September GDP numbers were a blip.

The Indian economy grew by 5.4 per cent in real terms in the July-September quarter of the current financial year. This was much lower than the Reserve Bank of India (RBI)'s GDP forecast of seven per cent. In the April-June quarter of FY25, India's GDP grew slower than the central bank estimated.

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India Q3 GDP Growth Estimates

SBI Research's October-December GDP estimates highlighted its in-house developed 'Nowcasting Model', which leverages 36 high-frequency indicators. Assuming the National Statistical Office (NSO) did not announce major revisions in the Q1 and Q2 figures, SBI estimates the 2024-25 full-year GDP at 6.3 per cent.

"Continuing the momentum, a healthy rural economy is further reinforcing stability and sustains momentum in other sectors even as the rural agriculture wage growth is consistent and domestic tractor sales and rabi crop sown have picked up momentum," said SBI Research in its report.

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"Patterns of demand and consumption seem buoyant in Q3 on capex trends. India Inc. exhibits better EBIDTA and corporate GVA (gross value added)," the research report read. Despite upheavals in global geopolitics and trade-supply chains being susceptible to winds of re-globalisation, the Indian economy has been leaning against the winds, asserted SBI Research.

According to SBI Research, India's capital expenditures, or capex, have improved in the third quarter. The majority of the states' capex as a percentage of the Budget estimate (BE) was lower in 2024-25 but embraced momentum in Q3, which augurs well for future developments.

"The slowdown in Q3CY24 - down by intensifying geopolitical developments, supply chain disruption and the consequent imported inflationary pressures - was not just for India. Despite that, India continued to remain one of the fastest growing economies," it said.  Two-quarters of low economic growth has left economists hoping for a rebound in the second half of FY25.

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It quoted the recent update by the IMF, which projected India's growth to be 6.5 per cent for both 2024-25 and 2025-26 on the back of robust domestic demand, infrastructure support, and governments' strategic policy interventions. India's GDP grew by 8.2 per cent during the financial year 2023-24 and continued to be the fastest-growing major economy. 

The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22. In its latest monetary policy, the RBI cut India's growth forecast for 2024-25 to 6.6 per cent from 7.2 per cent. Hence, the government expects 6.4 per cent GDP growth for the current fiscal year after subdued growth in previous quarters.

In 2025-26, the Indian economy is projected to grow between 6.3 per cent and 6.8 per cent, as noted in the Economic Survey presented on January 31. The document highlights that the country's economic fundamentals remain strong, supported by a stable external account, fiscal consolidation, and private consumption.