India’s Q3 GDP Growth Trends
Context:
India’s real GDP saw a growth of 6.2% in Q3 FY 2024-25 (October-December 2024). The Q3 figure is better than Q2, which was only 5.6%.
- However, the Q3 growth rate was 0.2 percentage points below RBI’s estimate.
- Apparently, it was 9.5% in Q3 of 2023-24.
Relevance:
GS-03 (Economy)
What were the key economic drivers?
- Government Spending: Increased by 8.3%, up from 2.3% last year.
- Private Consumption: Grew by 6.9%, higher than 5.7% in Q3 2023.
- Exports: Rose 10.4%, compared to 3% in the previous year.
- Imports: Declined 1.1%, possibly due to rupee depreciation.
- However, Gross Fixed Capital Formation (Investment Growth) slowed to 5.7% from 9.3% in Q3 2023, despite increased public spending.
Challenges and Future Projections
- To achieve the 6.5% GDP target for FY 2024-25, the economy needs 7.6% growth in Q4, which experts consider ambitious.
- The Chief Economic Adviser highlighted three crucial factors for achieving this:
- Export Surge
- Higher Capital Expenditure (Capex) Growth
- Boost in Private Consumption due to events like the Maha Kumbh Mela
Conclusion:
The economic outlook remains optimistic, but sustaining momentum will depend on policy support and external economic conditions.
