GDP growth: India’s latest economic data stirs up a range of emotions

Subscribe to enjoy similar stories. Hard data is supposed to be cold and impersonal but also has the capacity to evoke myriad feelings. Consider the series of national-accounts data released on 28 February: India’s gross domestic product (GDP) for the quarter from October to December 2024, second advance GDP estimates for 2024-25, first revised estimate for the previous year and the final estimate for 2022-23.

The numbers stir euphoria over upgrades to old data: GDP growth stands revised to 9.2% for 2023-24 and to 7.6% for 2022-23. Then there is relief that the second advance estimate for 2024-25, the current year, has GDP growing by 6.5%, higher than the 6.4% estimated earlier. Yet, some anxiety seems inescapable when this number is viewed against the 6.2% figure for the third quarter of 2024-25; the economy must grow by 7.6% in the fourth quarter to attain 6.5% growth for the full year.

In the face of street scepticism, chief economic advisor (CEA) V. Anantha Nageswaran has expressed confidence in a last-quarter consumption revival, buoyed by religious tourism, which would help the economy achieve that uptick. As it happens, the data also provides a line of sight into some of the economy’s lingering structural deficits.

Growth impulses have been dampened by a prolonged absence of ‘animal spirits’ in the private sector, as seen in its pronounced apathy to domestic investment. Growth in gross fixed capital formation slowed down further to 5.7% in this year’s third quarter (against 6.7% in the first and 5.8% in the second), necessitating capex growth of almost 6.4% in the last quarter to enable the overall economy to grow 6.5%, which is somewhat over-optimistic at this juncture. The CEA has expressed consternation over