India’s GDP Growth Expected Between 6.2% to 6.3% For Q3FY25: SBI Report

On Wednesday, February 19, SBI Economists, released a report on the Indian economy, wherein India’s GDP growth for Q3 FY25 (October-December) of FY2024-25 is expected to be between 6.2% and 6.3%. This growth is driven by strong demand, capital expenditure trends, and improved financial performance in Indian companies.

The SBI report suggests that the dip observed in Q2 FY25 is just a temporary “blip.” It projects a full-year GDP growth of 6.3% for FY25, assuming there are no significant revisions to earlier quarter data from the National Statistical Office (NSO).

Official GDP Data 

The official GDP data for Q3 is anticipated to be released on February 28. The report indicates that 74% of economic indicators showed positive acceleration in Q3 FY25, up from 71% in Q2 FY25.

A strong rural economy is playing a key role in maintaining economic stability and supporting growth across various sectors. Continued growth in rural agricultural wages, rising domestic tractor sales, and an increase in rabi crop sowing are all contributing factors to this stability.

Capex trends also show progress in Q3 FY25. While several states reduced their Capex as a percentage of Budget Estimates (BE) for FY25, they gained positive momentum in Q3, signalling optimism for future growth.

Growth in India’s Manufacturing Sector

Positive developments in India Inc. are also noteworthy. The report highlights that India’s manufacturing sector, as measured by the Index of Industrial Production (IIP), grew from 3.3% in Q2 FY25 to 4.3% in Q3 FY25. Additionally, India Inc. reported positive EBITDA growth (44 basis points) for the first time in two quarters, and corporate gross value added (GVA) showed significant quarter-on-quarter improvement.

Despite the global economic slowdown, India remains one of the fastest-growing economies. The International Monetary Fund (IMF) recently projected India’s growth at 6.5% for both FY25 and FY26, driven by strong domestic demand, infrastructure investment, and government policy support.

SBI economists have also developed a “Nowcasting Model” to estimate GDP using 36 high-frequency indicators linked to industrial and service activities, along with global economic factors. The model uses a dynamic factor approach to analyse these indicators from Q4 FY13 to Q1 FY23.

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