ICRA Predicts India's GDP Growth To Speed Up In 3rd Quarter

India’s economy is expected to grow at a faster pace in the third quarter of the current financial year (October–December 2024) compared to the first half (April–September 2024), according to a report by ICRA. The optimistic forecast is driven by improved economic indicators and robust activity across various sectors.

ICRA's analysis highlights that preliminary data for November 2024 indicates a favourable trend. Key contributors include an increase in electricity demand due to a favourable base effect and sustained festive season demand, which boosted vehicle registrations.

“These trends reinforce ICRA’s expectations of a pick-up in the GDP growth in Q3 FY2025 as compared to H1 FY2025,” the report noted.

Sector-specific data underscored the momentum. Vehicle registrations saw a 32.4 per cent year-on-year growth in October 2024, rebounding from an 8.7 per cent contraction in September. Strong demand for two-wheelers and passenger vehicles fueled this recovery. Similarly, petrol consumption surged to 8.7 per cent, up from 3.0 per cent in September, while domestic air passenger traffic grew to 9.6 per cent, compared to 6.4 per cent in the previous month.
Industrial activity also showed improvement. Two-wheeler production rose by 13.4 per cent, rail freight volumes increased by 1.5 per cent after a contraction of 0.7 per cent, and diesel consumption registered marginal growth of 0.1 per cent, recovering from a 1.9 per cent decline in September.

India's non-oil exports posted significant growth, rising 25.6 per cent in October compared to 6.8 per cent in September. Key contributors to this growth included electronic goods, engineering goods, chemicals, and readymade garments.

ICRA’s Business Activity Monitor, a composite measure of economic activity, recorded a year-on-year growth of 10.1 per cent in October 2024, the highest in eight months, improving from 6.6 per cent in September despite challenges posed by a high base effect.

The report’s findings reflect India’s economic resilience and strengthen expectations of robust GDP growth in the coming months.

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