India's GDP growth likely at 6.2%-6.3% in Q3 FY25, economic indicators show improvement: SBI Research

India's economy is expected to grow at 6.2%-6.3% in the third quarter of the 2024-25 fiscal year, according to an estimate by SBI Research, which cited strong momentum across leading economic indicators despite global geopolitical uncertainties and supply chain disruptions.

The forecast, based on its ‘Nowcasting Model’ that tracks 36 high-frequency indicators, suggests full-year GDP growth at 6.3%, assuming no major revisions to previous quarters by the National Statistical Office (NSO). The official Q3 GDP data is due on February 28.

Economic indicators show improvement

The percentage of indicators showing acceleration rose to 74% in Q3 FY25, up from 71% in the previous quarter.

Agricultural wages have remained stable, while domestic tractor sales and rabi crop sowing have picked up, bolstering rural economic stability.

With state-level spending gaining momentum, capital expenditure (CAPEX) has also shown signs of improvement in the third quarter.

Despite global headwinds, India remains one of the fastest-growing economies, according to the report. The International Monetary Fund (IMF) has projected India’s GDP growth at 6.5% for both FY25 and FY26, supported by strong domestic demand and government policy interventions.

Rural demand remains a key driver of growth, supported by stable wage growth and a strong agricultural sector.

The Reserve Bank of India’s (RBI) surveys suggest that consumers are becoming more optimistic about economic prospects, inflation trends, and global developments, which could support long-term sustainable growth.

Outlook and possible GDP revisions

SBI Research noted that the NSO may revise Q1 and Q2 GDP estimates when it releases the second revised estimate for FY25 on Feb. 28. However, barring major revisions, the full-year GDP is expected to remain around 6.3%.