Indian economy to grow at 6.3% in Q3: MC Poll

Indian economy grew at a faster clip

The Indian economy likely grew at a faster clip of 6.3 percent in the third quarter of FY25 from 5.4 percent in the previous quarter, buoyed by rural recovery and a capex push from the Centre, a Moneycontrol poll of 19 economists has said.

“The improvement is led by revival in rural demand and rise in Central government capital expenditure. Urban demand is also showing some signs of improvement but the recovery remains relatively softer than rural demand,” said Gaura Sengupta, chief economist, IDFC First Bank.

Fast-moving indicators also pointed to a recovery in the October-December period after a disappointing second quarter when growth slipped to a near two- year low, experts said.

“Several high-frequency indicators, such as passenger vehicle sales, petrol consumption, domestic air passenger traffic and central government capital expenditure have shown improvement in Q3 compared to the previous quarter,” Rajani Sinha, chief economist, CareEdge, said.

Corporate results, too, indicate a modest recovery after a contraction in profitability during H1 FY25, Sinha said.

For the fiscal, economists pegged growth at 6.4 percent, in line with the first advance estimates released in January.

The government will release revised data for the previous fiscal, along with second advance estimates and third quarter GDP data on February 28.

The economy grew 6 percent in the first half of the year. It will need to log a 6.8 percent growth for the remaining two quarters to reach the 6.4 percent growth mark.

A 6.3 percent growth in the third quarter, pegs the fourth quarter target higher.

The full year growth forecasts ranged from 5.9 percent to 6.6 percent.

A better year ahead?

For the coming fiscal, there was more optimism. The economists polled by Moneycontrol expect 6.6 percent growth in the coming year, with forecasts ranging from 6.1 to 7 percent.

“The FY26 GDP growth is expected to be same as India’s best decadal growth (FY11-FY20),” said Paras Jasrai, senior analyst, India Ratings and Research.

The economic survey pegged the growth at 6.3-6.8 percent for the coming fiscal.

Easing of monetary conditions is also likely to help push growth, along with a recovery in consumption spending.

The Reserve Bank of India early this month delivered the first rate cut in five years. The policy rate now stands at 6.25 percent.