Growth in December quarter seen to rebound at 6.2-6.4%

NEW DELHI: Economic growth is estimated to have rebound in Oct-Dec quarter (Q3) of the current financial year, led by a revival in govt spending and improvement in some key indicators.

Economists estimate growth in Q3 to be in 6.2-6.4% range, higher than the seven-quarter low of 5.4% in July-Sept. Growth in July-Sept was slower than 6.7% in April-June period and below 8.1% recorded in July-Sept of 2023-24. The sharp slowdown was attributed to a number of factors, including slowing govt spending due to elections and sluggish consumption owing to stubborn price pressures.

"India's economic performance in Q3 FY2025 benefited from a sharp ramp-up in aggregate govt spending (central and state) on capital and revenue expenditure, high growth in services exports, a turnaround in merchandise exports, healthy output of major kharif crops, etc, which would have buffered rural sentiment. Some consumer-focussed sectors saw a pick-up during the festive season, even as urban consumer sentiment dipped slightly, and other sectors, such as mining and electricity, saw an improvement after weather-related challenges in the previous quarter," said Aditi Nayar, chief economist at Icra.

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