Friday, March 14, 2025

Indian economy in robust spot globally in 2025 with high frequency indicators picking up growth

Date:

Share post:

spot_img

New Delhi, Jan 2: As 2025 begins on a note of heightened global uncertainties ahead of the US President-elect Donald Trump’s inauguration, India continues to be in a much stronger position with high frequency indicators showing a pick up in the pace of growth in the third quarter of current fiscal (Q3 FY25), according to a report on Thursday.

GST collections, services purchasing managers’ index (PMI), air passenger growth, and vehicle registrations saw a notable improvement in Q3 versus Q2, according to a Bank of Baroda (BoB) report.

On the other hand, in China, while the manufacturing sector is expanding slowly, lifting domestic consumption and reviving the real estate sector is proving to be a task for the administration. The US economy is giving mixed signals regarding growth. While the labour market appears to be softening and manufacturing activity is weak, retail sales, pending home sales, and the service sector seem to be doing well.

In Europe, manufacturing activity is unable to pick up pace so far, while the service sector is regaining ground. In India, the current account deficit (CAD) narrowed to 1.2 per cent of GDP in Q2 FY25 from 1.3 per cent of GDP in Q2 FY24.

“While the trade deficit was higher, buoyant services exports as well as continued strength in remittances underscored the lower CAD. Our year-end market analysis shows that both Sensex and Nifty 50 surged by 8.7 per cent and 9 per cent in CY24. Sensex touched an all-time high this year as it breached the mark of 85,500,” said Sonal Badhan, economist, Bank of Baroda.

Sectors including real estate, consumer durables, and IT were amongst the best-performing stocks in CY24. The Indian rupee depreciated by 2.8 per cent in 2024, but remained one of the better-performing currencies among its peers. The pressure on yields was lower and boosted demand flow as the market witnessed the bond inclusion in the JP Morgan emerging market index, Bloomberg, and FTSE Russel.

According to the report, high frequency indicators have shown notable improvement in the October-December 2024 period. GST collections have jumped by 8.3 per cent (YoY) in Q3 to Rs 5.5 lakh crore, and are also up from Rs 5.3 lakh crore in Q2, signalling further improvement in consumption pattern.

Apart from this, helped by festive demand, other indicators of urban consumption have also improved. Air passenger air traffic registered 11.6 per cent growth in Q3, compared with 7.8 per cent growth registered in Q2. Services PMI averaged 59.2 in Q3 versus 58.1 in the same period last year.

“We expect quarterly corporate results to also show improved performance in Q3,” said Badhan. On the central bank actions, the report said growth is expected to recover in H2 FY25 and inflation abating, “we see a scope of 25 bps rate cut in February 2025. We expect a cumulative easing of 50-75bps in the current cycle” Furthermore, with the expectation of a pick-up in government spending followed by improvement in both government and private investment in H2, the IIP growth will perform a lot better in H2 FY25 from H1 FY25, it noted.

IANS

spot_img

Related articles

‘New Zealand PM Luxon has huge appetite to engage with India’

Auckland, March 14: India-New Zealand bilateral relationship is expected to get further strengthened across all sectors and close...

‘Rajmata’ will be first tigress of Rajasthan to be honoured with installation of statue at Sariska

Jaipur, March 14: A life-sized statue of tigress ST-2, who was also called 'Rajmata', will be installed in...

India needs to call Turkey what it is – sponsor of terrorism: Top Middle East expert

New Delhi, March 14: In a detailed and exclusive interview with IANS, Michael Rubin, a leading expert on...

The ‘Teen Deviyaan’ of Aamir Khan’s life: A story of love and transformation

Mumbai, March 14: Bollywood superstar Aamir Khan left the entire Mumbai media in utter disbelief when he introduced...