Q3 GDP Growth Rate is 6.2%, Full year growth Projection at 6.5%

India Q3 GDP Data: The Indian economy grew by 6.2% in the third quarter of FY25, up from 5.4% growth in the previous quarter, aided by stronger rural consumption spending after good monsoons and increased government spending. The yearly GDP growth is estimated at 6.5%. 

Trade uncertainties still going, especially the potential U.S. tariffs under a Donald Trump presidency. Also, the trade patterns of the economy during the current fiscal year increase the scepticism regarding India’s ambition to emerge as the world’s third largest economy by 2030.

As per the First Revised Estimates, India’s real GDP growth stood in FY24 at 9.2%, the highest in a decade for any year besides the post-pandemic surge in FY22. Growth is still not as strong as 8.6% in the same quarter a year ago. A slowdown was evident in July-September when the GDP growth rate started dipping, indicating the slowest pace of growth in the last seven quarters.

Analysis of Q3 GDP Growth

(Source: TOI)

Why is this Data Important?

During the first quarter of FY2024-25, GDP growth was recorded at 6.7%, however, this recording dramatically reduced to 5.4% in the second quarter. As speculation concerning a slowdown and debate as to whether the slowdown is systemic or cyclical continue, everyone anticipates the GDP numbers for the third quarter more than ever as it could help clarify matters.

Moving on to the previous year, FY2023-24, it is provisionally reported that the annual growth rate of GDP was 8.2%. The NSO estimates for FY2024-25 in January contained a growth projection of 6.4%, a figure which would mark a record low for the four preceding years. 

Coupled with the dismal sentiment over the 5.4% growth recorded in the second quarter of the ongoing financial year, even a slightly weaker GDP growth in the third quarter would position the economy squarely at risk of missing the annual growth projection of 6.4% for the current financial year.

Conclusion

India’s 6.2% GDP growth in Q3 is a bit better than last quarter’s contraction, coming about due to improved performance in rural areas and increased government expenditures. It is, however, less than the growth recorded during the same period last year, which stood at 8.6%. The prospect of achieving this target is likely to be compromised because of trade uncertainties and global risks. India’s full-year target of 6.5% will be achieved only if economic activities are sustained during the remaining months of the fiscal year.

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