New Delhi, Nov 21: India's economy is expected to grow at an accelerated pace in the third quarter of the current financial year (October-December 2024), surpassing the growth seen in the first half of the year (April-September 2024), according to a report by ICRA.
The optimism stems from improving economic indicators and strong activity across various sectors. Preliminary data for November 2024 also points to a positive trajectory. Electricity demand has picked up, supported by a favorable base effect, while festive season demand has driven an increase in vehicle registrations.
ICRA's report stated, "These trends reinforce our expectations of a pick-up in GDP growth for Q3 FY2025 compared to H1 FY2025."
Several mobility and transportation indicators showed substantial improvement. Vehicle registrations saw a sharp year-on-year increase of 32.4 percent in October 2024, recovering from a contraction of 8.7 percent in September. This growth was primarily driven by strong demand for two-wheelers and passenger vehicles. Petrol consumption grew by 8.7 percent, up from 3.0 percent in September, while domestic air passenger traffic rose to 9.6 percent, compared to 6.4 percent in the previous month.
Additional data showed a 13.4 percent increase in two-wheeler production, a 1.5 percent rise in rail freight (up from a 0.7 percent decline in September), and a modest 0.1 percent growth in diesel consumption after a 1.9 percent drop the previous month. The country's non-oil exports also performed strongly, with a 25.6 percent growth in October 2024, compared to a 6.8 percent increase in September. Key sectors contributing to this growth included electronic goods, engineering products, chemicals, and ready-made garments.
The ICRA Business Activity Monitor, a composite indicator of economic performance, reported a year-on-year growth of 10.1 percent in October 2024, the highest in eight months, up from 6.6 percent in September despite a challenging base effect. These positive trends across multiple sectors reflect India's economic resilience and bolster expectations of robust GDP growth in the upcoming months.
