India’s economy was 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) as positive indicators are emerging of economic activity picking up pace, according to a report by ICRA.The report states that the preliminary data for November indicates a positive trend. The growth in electricity demand has picked up, while festive season demand continues to drive an increase in vehicle registrations.
“These trends reinforce ICRA’s expectations of a pick-up in the GDP growth in Q3 FY2025 compared to H1 FY2025.”
Economic 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, the report points out.
This increase was fuelled by a 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 further states that the country’s non-oil exports have posted a robust growth of 25.6 per cent in October 2024, up from 6.8 per cent in September. The main contributors to this growth include high-value manufactured items such as electronic products, 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 report states.
The upbeat trends across various sectors reflect India’s economic resilience and reinforce expectations of stronger GDP growth in the coming months, the report added.