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The GDP growth in the fourth quarter is likely to be in the 6.5-7% range, much below the National Statistical Offices’ (NSO) implicit estimate of 7.6%. In the fourth quarter of FY24, the GDP
grew at 8.4%. While rating agency ICRA has estimated the GDP growth at 6.9%, Nomura and Morgan Stanley have pegged the growth at 6.7%. SBI has been little less optimistic about the growth
in the fourth quarter as it projects the GDP to grow at 6.4-6.5%. Based on lower-than-expected Q4 estimates, most analysts have now revised the FY25 GDP growth downwards to 6.2-6.3% against
the government’s estimate of 6.5%. The government will announce the Q4 GDP estimate on 30 May. “We believe that GDP growth is likely to be lower at 6.7% and GVA growth will inch up to 6.4%,
both up from 6.2% in Q4 2024,” says Nomura as it sees weakness in Industrial growth and moderation in private consumption, fixed investment and exports. It expects the Rabi crop output to be
robust, which will further strengthen the agriculture sector output. An SBI Research report says its in-house Model incorporating 36 high frequency indicators associated with consumption
and demand across industry/service activities and global economy captures slight moderation in economic activities, and thus forecasts the GDP growth for Q4 FY25 around 6.4-6.5%. It says
that the growth outlook is relatively more stable for India at 6.2% in FY25 (6.3% for FY26), supported by private consumption, particularly in rural areas, but this rate is 30 bps lower than
the earlier estimate on account of higher levels of trade tensions and global uncertainty. As per ICRA, unless there are material revisions in the data for Q1-Q3 FY2025, it projects a sharp
step down in the full-year GDP to 6.3% in FY2025 from 9.2% in FY2024, driven by industry. Morgan Stanley, which pegs its FY25 growth at 6.3%, says domestic demand trends will be the key
driver of India's growth momentum amid lingering uncertainty on the external front. “Within domestic demand, we expect consumption recovery to become more broad-based with urban demand
improving and rural consumption levels already robust. Within investments, we see public and household capex driving growth while we expect private corporate capex to recover gradually,”
said Morgan Stanley in a note.