India's GDP growth forecast for the fourth quarter of 2024-25 is 6.8-7%: Report
According to a Baroda report released on Friday, India's economy is expected to grow 6.8-7% in the fourth quarter of fiscal year 2024-25, driven by the agricultural sector.
Throughout the fiscal year, the estimates have been fixed at 6.2-6.4%, and the report shows that India's economy is much better on the back of strong macroeconomic fundamentals than its global peers.
The report said growth will reach 6.4-6.6%, while currencies are easing, lower inflation and solid domestic demand support budget drivers and continued capital expenditure prospects for higher prospects.
However, it noted that any geopolitical conflict and global tariff collection would have adverse effects on this optimism.
The report noted that FY25 had a strong agricultural growth rate of 7.7% in the fourth quarter. This will be much higher growth, while the 0.9% growth indicated in Q4FY24. As noted in the Second Early Estimation, this is on the back of record food production, which includes estimates of Kharif and rabies crops.
However, growth in the fourth quarter, while higher than in the third quarter, was uneven in various sectors, with some better growth than others.
In the industry, the mining industry is expected to grow 1.5% in the 25% quarter in the fourth quarter, compared with a 0.8% growth rate of 0.8% in the same period last year.
On the other hand, growth in the manufacturing sector may drop the 11.3% growth rate of Q4FY24 to 1.8%. This is attributed in part to an unfavorable basis, and also to weaker company revenues.
In the performance of companies in the steel, steel, capital goods, textiles and other industries, the profit margin is relatively low. Despite the high price of the goods, slowdowns were recorded. The growth rate of the power sector is also slower, at 5.5%, while the growth rate of Q4FY24 is also at 8.8%.
The construction sector is expected to grow at a fixed rate on the back of improved steel and cement production in Q4. Continuous promotion of government capital expenditures to the sector.
For services, we see a trend of mixing. Marriage season and mohm will not only promote the hospitality industry, but also areas such as transportation, logistics, food and beverage.
The fourth quarter of the trade, hotel and transportation sector is likely to grow 6.4% from 6.2% in the fourth quarter. The amount of GST tax revenue continued to grow at a steady rate. During the same period, financial sector growth (down from 9% by 6%) is expected to grow at a lower rate.
Public administration and defense will register some acceleration amid rising net income expenditure.
In the future, the report notes that rural demand in FY26 may continue to be in momentum given the expectation of a favorable monsoon. Neutral ENSO conditions are expected to prevail in the coming months (NOAA), which is very good for agricultural growth. Consumption is expected to reach pace, as higher disposable income will support this in new tax incentives.
Furthermore, the continuity of the loose cycles given the lower inflation will provide a buffer for growth. Lower commodity prices are expected to provide further support.
“Based on the above, we expect the Indian economy to grow at 6.4-6.6% in fiscal 26. However, given the challenges of global tariffs, there are downside risks in these forecasts, especially for external sectors.
