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Investment demand slows slightly to 5.7% in Q3 FY25

The share of investment in GDP slowed marginally to 33.4 percent in 2024-25 so far.

February 28, 2025 / 17:16 IST
As government capex picks up, there is incipient recovery in private capex

India’s gross fixed capital formation (GFCF) at constant prices, which is taken as a proxy for capital expenditure in the economy, has slightly slowed to 5.7 percent in Q3 FY25 (October-December) year on year.

According to the latest gross domestic product (GDP) data, released by the National Statistical Office on February 28, growth in GFCF fell slightly in Q3 from revised figure of 5.8 percent in Q2 FY25.

The share of investment in GDP so far in 2024-25 has remained at 33.4 percent as compared to 33.5 percent in 2023-24, at constant prices.

At current prices, the share of investment in GDP saw a negligible decline at 29.6 percent in 2024-25 so far as compared to 30.4 percent in the previous fiscal.

As government capex picks up, the incipient recovery in private capex and in private consumption may gather pace.

There is softening of growth in Gross Fixed Capital Formation (GFCF), from 10.1 per cent in H1 FY24 to 6.4 per cent in H1 FY25, according to the Economic Survey 2025 report.

The report released on January 31 said, "Q1 FY25 witnessed a slowdown in capital expenditure across different levels of government on account of the conduct of the general elections. Private sector investment growth may have remained subdued thus far in FY25 on account of the domestic political timetable, global uncertainties and overcapacities".

Meghna Mittal
Meghna Mittal Deputy News Editor at Moneycontrol. Meghna has experience across television, print, online and wire media. She has been covering the Indian economy, monetary and fiscal policies, Finance and Trade ministries. She tweets at @Meghnamittal23 Contact: meghna.mittal@nw18.com
first published: Feb 28, 2025 05:16 pm

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