North India Statesman
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India Q4 GDP: India’s economic growth rate may gain momentum in the fourth quarter of FY 2025 and may reach the highest level in at least four quarters. The growth rate was moderate in the last three quarters. Analysts say that a strong growth in the fourth quarter is expected, which will be motivated by agricultural production, rural consumption demand, trade, hotel, transport and increase in construction.
The economic growth rate was 6.5 percent, 5.6 percent and 6.2 percent in the first three quarters of FY 2025. The National Statistics Office (NSO) has estimated an increase of 6.5 percent in FY 2025 and 7.6 percent in the fourth quarter. The NSO will release the provisional estimate of the fourth quarter development figures and gross domestic product (GDP) growth for FY 25 this Friday.
In the fourth quarter, fertilizer sales increased by 5.4 percent compared to the third quarter and the tractor sales increased by 23.4 percent. Such early indicators are used to assess the growth of the agricultural sector. During this period, agricultural loans increased at a slow rate of 11.3 percent, but it was in double digits. Aastha Gudwani, the chief economist in Barclays in India, said, “The upcoming crop forecast is likely to produce a record production of wheat.”
Accordingly, we will see the increase in the growth rate of the agricultural sector. Accordingly, gross value promotion (GVA) in agriculture will increase by 5.8 percent in the fourth quarter, which is more than 5.6 percent in the third quarter. Although the demand in cities has slowed down, rural demand is expected to rise in the fourth quarter, which will be inspired by an increase in agricultural production and real increase in rural wages (2.3 percent).
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Gaura Sengupta, chief economist of IDFC Bank, said, “According to the Nielson IQ survey, FMCG sales in rural areas have increased by 8.4 percent in the fourth quarter.” However, the sale of two -wheelers and the increase in diesel consumption has slowed down, and there has been no uniform improvement in rural indicators. Sales of passenger vehicles increased by 2.3 percent in the quarter, increased production of consumer goods by 1 percent, and individual loans (14 percent) increased the same as urban consumption. Sengupta said, “The actual urban wage growth rate remains in the lower single digit.” FMCG sales in urban areas were weak at 2.6 percent. There is also a recession in electronic payment through UPI, debit and credit cards in cities.
However, in the fourth quarter, the growth rate of domestic air travel in the fourth quarter led to a 12 percent improvement in toll collection, 19.4 percent in e-way bill collection and 3.7 percent in port freight, indicating an increase in trade, hotel and transport sectors. The growth in the construction sector is reflected in 11.8 percent of steel consumption in the service sector and 12.4 percent in cement production.
Care ratings said in a note, “The increase in hotels and transport sectors may further increase the GDP in the fourth quarter.” Travel activities have increased due to Kumbh Mela and major events. Additionally, the arrival of foreign tourists declined by 1.3 percent in the fourth quarter, while the third quarter had declined by 3 percent. But there is a possibility of recession in industrial production. Sengupta said, “The net profit growth of non-financial companies slowed down to 6.5 percent in the fourth quarter.” The sales growth was also in single digit. The increase in the cost of material used in production has reduced the benefits of manufacturers.
