India's Q3 GDP growth beats projections; prompts upward revisions for FY25

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Read here: India's Q3 GDP growth at 8.4%, beats D-Street estimates; economy grows at fastest pace in 6 quarters: 5 key highlights Soumya Kanti Ghosh, Group Chief Economic Adviser at State Bank of India believes FY24 GDP growth to be near 8%. “The third quarter GDP numbers jolted the psyche and cognitive framework of most in markets, while sweeping some by a pleasant surprise. Clearly, right policy prisms and perspectives can trump irrational expectations bordering fault lines.

Based on the FY24, 7.6% GDP growth, we estimate Q4 GDP growth at 5.9%, which we believe is an understatement. Thus, it is most likely that FY24 GDP growth could be within striking distance of 8%," Ghosh said. However, there was a 190 basis points (bps) sharp wedge between GDP and gross value added (GVA) growth, which economists said, reflects a higher growth in government’s net indirect taxes, possibly with lower subsidies.

The second estimate for FY24 puts real GDP 30 bps higher at 7.6%, even as real GVA is unchanged at 6.9%. GVA growth was just 6.5% in October-December, down from 7.7% the previous quarter. Gross value added is GDP minus net taxes on products.

Also Read: India's surprising GDP growth rate leaves economists puzzled. Here's why “Interestingly, even as FY24 nominal GDP growth is a tad higher than the first estimate of 9.1%, it is 10% lower in value terms. The implied Q4 GDP/GVA growth print will slow to 5.9%/5.4%, indicating most of the growth moderation is borne by Q4.