New Delhi— India’s GDP is expected to grow by 6.8% in the fourth quarter (Q4) of FY25, bringing the full-year growth estimate to 6.3%, according to a new report by CareEdge Ratings. The projection is supported by strong performance in key sectors such as agriculture, construction, transport, and hospitality.
The report, titled “The Economic Meter and GDP Preview for Q4FY25,” notes that overall consumption remains healthy, largely driven by a rebound in rural demand. However, it cautions that urban consumption trends present a mixed outlook and will require close monitoring in the months ahead.
“Strong disbursements of central capital expenditure (capex) toward the end of Q3 are expected to fuel investment activity in Q4,” the report states.
Looking ahead, the report identifies several positive factors likely to support economic activity: a recovering rural economy, easing tax burdens, potential rate cuts by the central bank, falling inflation, and expectations of a favorable monsoon season. A sustained recovery in consumer spending will be crucial to spurring private sector investment and capital expenditure, it adds. Despite this optimism, global uncertainties remain a potential drag on growth, with FY26 GDP projected at 6.2%.
In agriculture, activity remained robust. Rabi crop sowing outpaced last year’s level by 2%, while domestic tractor sales surged 23.4% year-over-year (YoY) in Q4—up from 13.5% YoY growth in Q3. Fertilizer sales also improved, rising 5.4% in January–February 2025, compared to just 0.4% in Q3.
The services and industrial sectors showed similar momentum. Domestic air passenger traffic grew 12% YoY in Q4, slightly higher than the 11.4% recorded in Q3. Mining output, as measured by the Index of Industrial Production (IIP), expanded 2.1% in Q4, up from 1.8% in the previous quarter.
Infrastructure and construction-related indicators also reflected solid performance. The IIP for infrastructure and construction goods rose 7.6% in Q4, an increase from 7% in Q3. However, there were some areas of concern: highway construction declined 8.4% YoY, and bitumen consumption fell 3.8% YoY in Q4.
Although central government capex saw a 4% decline in January–February 2025, the report suggests that strong spending at the end of Q3 will continue to support construction activity in Q4 due to the typical lag in its economic impact. (Source: IANS)
