New Delhi : India's economy is projected to grow at a faster pace in the third quarter of the current financial year (October-December 2024) compared to the first half (April-September 2024), according to a report by ICRA.
The report stated that this optimism is based on improving economic indicators and robust activity levels in various sectors. The report added that the preliminary data for November 2024 indicates a positive trend.
The growth in electricity demand has picked up due to a favorable base effect, while festive season demand continues to drive an increase in vehicle registrations. It said "These trends reinforce ICRA's expectations of a pick-up in the GDP growth in Q3 FY2025 as compared to H1 FY2025".
As per the report, several indicators related to mobility and transportation have shown significant improvement. Vehicle registrations surged to 32.4 per cent year-on-year in October 2024, a sharp recovery from a contraction of 8.7 per cent in September 2024.
This increase was fueled by strong demand for two-wheelers and passenger vehicles. Petrol consumption rose to 8.7 per cent from 3.0 per cent in September, and domestic air passenger traffic increased to 9.6 per cent from 6.4 per cent.
Additionally, two-wheeler production grew by 13.4 per cent, rail freight improved to 1.5 per cent from a decline of 0.7 per cent, and diesel consumption recorded marginal growth of 0.1 per cent after a contraction of 1.9 per cent in September.
The report also added that the country's non-oil exports also posted a strong performance, growing by 25.6 per cent in October 2024 compared to 6.8 per cent in September. Key contributors to this growth include electronic goods, engineering goods, chemicals, and readymade garments.
The ICRA's Business Activity Monitor, a composite indicator of economic activity, showed a year-on-year growth of 10.1 per cent in October 2024, the highest in eight months. This is an improvement from the 6.6 per cent growth recorded in September 2024, despite challenges from a high base effect.
The upbeat trends across various sectors reflect India's economic resilience and reinforce expectations of stronger GDP growth in the coming months.