India’s economy likely grew at 6.2%-6.3% in Q3 FY25: SBI

The country's largest lender, State Bank of India (SBI), has estimated that India's gross domestic product (GDP) likely rose by 6.2%-6.3% in the third quarter of the current financial year after growth slowed to a multi-year low of 5.4% in the previous quarter.

The sharp improvement in the economic growth in the December quarter happened despite upheavals in global geopolitics and supply chains being susceptible to winds of re-globalisation, SBI said in a report.

"Impinging upon our in-house developed ‘Nowcasting Model’ that leverages 36 high-frequency indicators, we estimate the GDP growth for Q3 FY25 should come around 6.2%-6.3%. Presuming no major revisions announced in the erstwhile Q1 and Q2 figures by NSO, we estimate the FY25 full-year GDP at 6.3%," SBI said.

The government will announce the third-quarter GDP figures on Friday, February 28.

SBI noted that a healthy rural economy further reinforces stability and sustains momentum in other sectors even as rural agriculture wage growth is consistent and domestic tractor sales and rabi crop sown have picked up momentum.

The Mumbai-based lender said that the capital expenditure (capex), which had slowed down in the wake of general elections, showed an uptick in the December quarter. For most of the states, capex as a percentage of budget estimates (BE) have been lower in FY25 so far, but are seeing momentum in Q3 FY25, which augurs well for future developments.

The bank also highlighted the robust factory output in December quarter as Index of Industrial Production (IIP) growth improved from 3.3% in September quarter to 4.3% in December quarter.

On the corporate front, SBI added that Indian Inc reported positive EBIDTA growth after two quarters, while Corporate GVA has improved substantially quarter on quarter.