India Q3GDP View | Indian economic growth pegged at 6.2% in December quarter from 5.4% in Q2: Union Bank of India

India Q3 GDP Growth: India's economic growth is expected to recover in the third quarter of the current financial year 2024-25 (Q3FY25), with gross domestic product (GDP) growth estimated at 6.2 per cent, up from 5.4 per cent in Q2FY25. According to a report by the Union Bank of India, the negative gap between GDP and gross value added (GVA) growth, observed in the first half of FY25 (H1-FY25), will likely have neutralized in Q3FY25.

“We estimate Q3FY25 GDP growth rate to mark an uptick to 6.2 per cent (5.4 per cent in Q2FY25), as the negative gap between GDP and GVA growth observed in H1-FY25 probably became neutral in Q3FY25," said the report.

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India Q3 GDP Growth Estimates

The report also pointed to a disconnect between the growth trends in net indirect taxes reflected in GDP and fiscal data. It warned that the decline in net indirect tax growth in fiscal data this quarter could pose a risk of a negative GDP-GVA growth gap in Q3FY25. Along with the Q3 GDP data, the government will release the second advance estimate for the full-year GDP of FY25.

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The report has kept its full-year GDP growth forecast unchanged at 6.4 per cent, which would require India's economic growth of around 6.8 per cent in the fiscal year's second half (H2), compared to six per cent in H1FY25. 

Notably, in February 2024, the GDP data for Q3FY24 saw an upward revision due to downward adjustments in previous quarters' figures. The report also stated an upward risk to the Q3FY25 GDP projection of 6.2 per cent if previous year numbers are revised downward. This revision trend has been observed in earlier GDP releases, which impacted the final estimates positively.

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The upcoming GDP data release for the third quarter of FY25 will provide a clearer picture of the country's economic performance and help assess whether the growth momentum continues in the second half of FY25. The GDP data for the third quarter of FY25 will be released on February 28, 2025.