Barclays expects the economy of India to expand by 7.2% in the fourth quarter of 2024-25, bolstered by a recovery in agriculture and a substantial increase in net indirect tax collections.
Our numbers show agricultural expansion is going to be better year-on-year, driven by preliminary crop production data underlining record wheat production. We hence predict growth in agriculture GVA in Q4 at 5.8%, which is higher than 5.6% in Q3," said Aastha Gudwani, Chief Economist for India at Barclays.
Supporting this stance, Union Agriculture Minister Shivraj Singh Chouhan declared on Monday that India's foodgrain production has jumped by more than 106 lakh tonnes to 1,663.91 lakh tonnes for 2024-25, a rise of 6.83% from last year.
"The rabi crop production increased from 1,600.06 lakh tonnes in 2023-24 to 1,645.27 lakh tonnes this season," the minister further said.
Barclays is ascribing the projected 7.2% GDP growth in the fourth quarter to a strong rise in net indirect taxes, which captures strong manufacturing and services activity. On a full-year basis, the bank is forecasting real GDP growth of 6.4%.
Earlier this month, Moody's Ratings projected India's GDP growth to be 6.3% for 2025 and anticipates the pace reaching 6.5% in 2026. This projection is closely in line with the IMF's projection, which holds India out as the sole major economy projected to achieve above 6% growth next year.
These estimates are modest relative to National Statistical Office's second official forecast of 6.5% for FY25, which was based on a more robust 7.6% growth rate in Q4.
Most economists' forecasts for the quarter January-March 2025 range from 6.4% to 7.2%, while growth for the full year is forecast between 6.3% and 6.4%.
Rating agency ICRA projects a 6.9% quarter-on-quarter GDP growth in Q4 FY25 and 6.3% for the fiscal year. Aditi Nayar, ICRA's Chief Economist & Head of Research & Outreach, said that "private consumption and investment registered uneven trends in Q4 FY25, partially owing to uncertainties related to tariffs. Services exports maintained their double-digit growth, but merchandise exports fell year-on-year in the quarter after increasing in Q3."
The government will publish the Q4 and full-year FY25 GDP figures officially on May 30.
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