India’s GDP growth in Q4 is projected at 6.8 per cent which brings FY25 growth at 6.3 per cent, supported by strong momentum in sectors such as agriculture, hotels and transport and construction, according to a new report.
While overall consumption growth is likely to remain healthy, supported by rural demand, the mixed outlook of urban demand needs monitoring, according to the CareEdge Ratings report, titled ‘The Economic Meter and GDP Preview for Q4FY25’.
“Strong central capex disbursement towards the end of Q3 will support investment growth in Q4,” the report mentioned.
Going forward, factors such as recovering rural demand, a lower tax burden, policy rate cuts, falling inflation, and expectations of a good monsoon should support an improvement in economic activity.
A sustained recovery in consumption will be critical to drive a meaningful uptick in corporate capex. However, global uncertainties pose a headwind. We expect the FY26 GDP growth at 6.2 per cent, said the report.
Agricultural activities have remained strong, with Rabi sowing of foodgrains surpassing last year’s level by 2 per cent. Domestic tractor sales increased by 23.4 per cent YoY in Q4 FY25, outperforming the 13.5 per cent YoY growth in Q3.
Additionally, fertiliser sales grew by 5.4 per cent in January-February 2025, higher than a growth of 0.4 per cent in Q3 FY25.
Domestic air passenger traffic grew by 12 per cent YoY in Q4 FY25, higher than 11.4 per cent YoY in Q3. IIP mining expanded by 2.1 per cent in Q4 FY25, higher than 1.8 per cent in Q3.
“Although central capex contracted by 4 per cent in Jan-Feb 2025, robust spending toward the end of Q3 FY25 is expected to support construction activity in Q4, given the typical lag in its impact,” the report mentioned.
IIP infrastructure and construction goods also showed improvement in Q4 FY25 growing by 7.6 per cent, higher than 7 per cent in Q3. However, highway construction and bitumen consumption contracted by 8.4 per cent YoY and 3.8 per cent YoY, respectively in Q4, said the report.
(IANS)
