India's Economic Growth Set to Accelerate in Q3 2024

India's economy is expected to grow faster in the third quarter of FY2025, fueled by improved economic indicators and sector activity. The ICRA report highlights that vehicle registrations and mobility show strong recoveries, driving optimistic GDP forecasts amid increased exports and consumer demand.

India's economy is poised for accelerated growth in the third quarter of the current financial year, according to a report by the ratings agency ICRA. Projected to outperform the first half of the year, the growth is attributed to favorable economic indicators and strong sectoral activities, as highlighted by preliminary data for November.

Electricity demand has surged, benefiting from a favorable base effect, while the festive season has contributed to a spike in vehicle registrations. These factors underscore ICRA's predictions for improved GDP growth in Q3, mirroring a robust economic environment.

Mobility and transportation indicators have shown marked improvement. Vehicle registrations grew 32.4% year-on-year in October, a robust turnaround from an 8.7% contraction in September. This spike was driven by heightened demand for two-wheelers and passenger vehicles. Additionally, petrol consumption jumped to 8.7%, with domestic air traffic and two-wheeler production showing comparable upswings. Rail freight and diesel consumption also rose, accompanied by a 25.6% increase in non-oil exports, supported by sectors including electronics and engineering goods.

According to ICRA's Business Activity Monitor, October saw a year-on-year growth of 10.1%, the highest in eight months. Compared to September's 6.6%, this growth reflects India's economic resilience amid ongoing challenges and sets a positive outlook for GDP expansion in upcoming months.

(With inputs from agencies.)