India’s GDP is estimated to have grown by 6.2-6.3% in the December quarter of FY25, according to the State Bank of India (SBI). The official GDP figures will be released on February 28, 2025. SBI Research, led by Group Chief Economic Adviser Soumya Kanti Ghosh, attributes the growth to increased capital expenditure and demand revival. Despite recent slowdowns, India remains one of the fastest-growing economies, with an expected full-year GDP growth of 6.3%.
India’s economy is expected to have grown by 6.2-6.3% in the December quarter of FY25, according to a report by State Bank of India (SBI), the country’s largest public sector bank. The bank’s research arm, SBI Research, led by Group Chief Economic Adviser Soumya Kanti Ghosh, attributes this growth to increased capital expenditure (capex) and demand revival. The official GDP figures will be released by the National Statistical Office (NSO) on February 28, 2025.
Steady Growth Despite Previous Slowdown
India’s economy grew by 5.4% in the July-September quarter (Q2FY25), significantly lower than the Reserve Bank of India’s (RBI) projection of 7%. The April-June quarter (Q1FY25) also saw growth figures falling short of expectations. However, the latest SBI estimate suggests that the economy has picked up momentum, driven by government spending and robust domestic demand.
Key Growth Drivers
SBI Research highlighted that capex trends in Q3FY25 were a major factor in supporting economic growth. While state capex was lower earlier in the fiscal year, it saw renewed momentum in the third quarter. Additionally, private sector investments and improving rural consumption have helped stabilize economic conditions.
“Patterns of demand and consumption seem buoyant in Q3 on capex trends. India Inc. exhibits better EBITDA and corporate gross value added (GVA),” the report noted. The rural economy has shown resilience, with consistent wage growth, rising domestic tractor sales, and strong rabi crop sowing activity.
Global Challenges and Future Outlook
Despite geopolitical tensions and global supply chain disruptions, India’s economy has remained strong. The International Monetary Fund (IMF) recently projected India’s GDP growth at 6.5% for both FY25 and FY26, citing infrastructure support and strategic policy interventions.
For the full fiscal year 2024-25, SBI Research estimates India’s GDP growth at 6.3%, assuming no major revisions to Q1 and Q2 figures by NSO. Meanwhile, RBI has revised its FY25 GDP forecast downward from 7.2% to 6.6%, and the government expects growth at 6.4% for the current fiscal year.
Looking ahead, the Economic Survey 2025 predicts India’s GDP growth to range between 6.3% and 6.8% in FY26, highlighting strong economic fundamentals, fiscal consolidation, and stable external accounts.
With capex-driven expansion and resilient domestic demand, India is expected to maintain its status as one of the world’s fastest-growing economies.
