Indian economy likely to have grown between 6.5-6.9% in Jan-March quarter of FY25

Retail growth after the post-festival season surge over Sep-Dec 2024, held up in Q4 FY25, to fare better than the H1 FY25 performance
| Photo Credit:
PTI

With a pick-up in consumption, the Indian economy is likely to have grown between 6.5 and 6.9 per cent during the January-March quarter of Fiscal Year 2024-25 (FY25). The government will formally announce the growth numbers for the fourth quarter and the full fiscal year on May 30.

Q4 growth projection could be the highest in four quarters, but lower than the the expected growth rate, projected at the time of announcement of October-December quarter (Q3 of FY25), Still, economists are hopeful of full fiscal growth rate between 6.2 and 6.4 per cent as they are expecting revision in numbers of the first three quarters. It may be noted that earlier, it was estimated that full-year growth could be 6.5 per cent. Based on the three-quarter numbers, the growth rate was estimated at 7.6 per cent in Q4 of FY25.

Fourth quarter is expected to have benefited from Maha Kumbh as this boosted the demand. At the same time, rural demand has maintained a certain pace. Latest data released by NielsenIQ showed that the Indian FMCG industry has garnered 11 per cent value growth in value in March quarter year-on-year (y-o-y), backed by a 5.1 per cent rise in volume and a 5.6 per cent increase in prices. The growth was largely driven by rural markets and smaller packs, the report noted.

This was echoed by a research report by QuantEco, which stated that urban demand has shown nascent signs of stabilisation in Q4. “Consumer confidence has picked up post reduction in personal income tax in the Budget. Additionally, retail sales growth after the post-festival season surge over Sep-Dec 2024, held up in Q4 FY25, to fare better than H1 FY25 performance,” it said Also, passenger vehicles sales growth though tepid, recovered to 2.4  per cent in Q4 FY25, faring better than the de-growth of 2 per cent in Q2 FY25.

While ICRA expects Q4 growth to print at 6.5 and 6.9 per cent, led by government spending and rural consumption.. India Ratings and Research (Ind-Ra) says GDP growth touched a four-quarter high of 6.8 per cent y-o-y during Q4FY25. “From the demand side, private consumption is a leading growth driver due to sustained positive real rural wage growth. The resilient services sector, along with the satisfactory rabi harvest, led to strong growth in the agricultural sector; this propelled GDP growth from the supply side during Q4FY25,” Ind-Ra said, while expecting  GDP growth is likely to have been a tad lower at 6.3 per cent in the full fiscal of FY25.

Published on May 11, 2025

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