India’s GDP growth to rise to a four-quarter high of 6.9% in Q4FY25: MC Poll

Economy to log faster rate of growth of 6.9% for Q4

Indian economy is set to log the fastest rate of growth in four quarters in Q4FY25 with GDP rising 6.9 percent, buoyed by consumer demand and agriculture performance, according to a Moneycontrol poll of 20 economists.

“GDP growth is expected to recover in Q4FY25 from the previous quarter driven by an improvement in consumer demand, government spending and healthy agriculture performance,” said Sakshi Gupta, principal economist, HDFC Bank.

India’s economy, however, would fall short of the 6.5 percent estimate set by the second advance estimate, settling at 6.3 percent for FY25.

Forecasts in the Moneycontrol pegged the growth estimate between 6.2 percent and 6.4 percent for FY25, with median fixed at 6.3 percent.

For the fourth quarter, the forecasts ranged from 6.5 percent to 7.2 percent.

The government had to achieve 7.6 percent growth to reach the 6.5 percent.

The government will release fourth quarter numbers along with provisional estimates for FY25 on May 30.

GVA-GDP gap

Although growth is expected to rise to a four-quarter high of 6.9 percent in Q4FY25, economists indicate that performance is likely to be more subdued, with subsidies payout contributing to higher jump.

“GDP data is likely to look strong optically even as underlying growth should be lower and in vicinity of 6.5%. Centre subsidy payout is likely to be down sharply based on budget estimates and that will boost the net indirect tax component thereby boosting GDP growth compared to GVA growth,” said Abhishek Upadhyay, senior vice-president & economist at ICICI Securities PD.

While the rural economy is expected to shine, which will also contribute to better performance on consumption front, experts indicate that manufacturing is set to lag.

“Manufacturing sector growth is expected to be subdued with non-financial listed companies profit growth similar to Q3,” said Gaura Sengupta, chief economist, IDFC First Bank.

India’s industrial production dipped to a four year low of 4.1 percent in FY25 compared with 6 percent in the previous fiscal. Construction goods production lagged at 6.7 percent compared with 9.9 percent in the previous fiscal, as states and centre pulled back on capex.

“Within services, moderation is expected in public services, with slowdown in Centre’s and state government revenue expenditure (ex. Interest and subsidies). Real estate services are also expected to see some moderation with weakness in stamp duty collection,” Sengupta added.

For the next fiscal, the economy is expected to brave global uncertainties growing at the same pace of 6.3 percent as FY25, economists noted.

The MC poll forecast for FY26 is lower than 6.5 percent estimate set by the RBI, but higher than 6.2 percent forecast by IMF.

Experts indicate that the Reserve Bank of India is set to deliver its third consecutive rate cut of the year, at its upcoming meet in June. The central bank has brought down the policy rate to 6 percent from 6.5 percent at the start of the year.