GDP: 'India's growth rate may improve in the third quarter of FY 2025', UBI made this claim

India's economic growth is projected to gain speed in the third quarter of FY 2024-25 with a rate of expansion in the country's GDP at 6.2 percent. It was at a rate of 5.4 percent in the second quarter. Union Bank of India reported this in a recent update.

The report said that the negative difference between GDP and gross value added (GVA) growth, seen in the first half of FY 25, may improve in the third quarter. "We estimate that GDP growth will accelerate to 6.2 percent in the third quarter of the current fiscal year (from 5.4 percent in the second quarter), as the negative gap between GDP and GVA growth seen in H1-FY25 likely neutralized in Q3FY25," the report said.

However, the report also pointed out a divergence in net indirect tax expansion trends in the GDP and the budget. It stated a decline in net indirect tax expansion in the budget in the ongoing quarter could risk perpetuating the negative divergence in the expansion in Q3FY25.

The report has left the forecast on full-year GDP at 6.4 percent and would require second-half financial year (H2) economic growth of around 6.8 percent, down from 6 percent in the first half.