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India's economic growth is expected to accelerate to 7.0 per cent in the fourth quarter of FY2024-25, according to the latest report from Union Bank of India (UBI). This marks a notable improvement from the 6.2 per cent expansion recorded in the third quarter of the current fiscal year.

Despite the stronger Q4 performance, UBI has revised its full-year GDP growth projection downward to 6.3 per cent, compared to the earlier estimate of 6.5 per cent. The report attributes this adjustment to evolving domestic and global economic conditions, as well as recent data trends.

Gross Value Added (GVA), a key measure of economic activity excluding taxes and subsidies, is also expected to show improvement, rising to 6.7 per cent in Q4 FY25 from 6.2 per cent in Q3. The report noted that high-frequency indicators provide a mixed picture, though there are signs of a modest rebound in underlying economic momentum.

Our proprietary economic activity index suggests a mild positive trend, closely aligned with private sector performance when excluding agriculture and government components, the report stated. This private sector GVA metric is projected to increase to 6.8 per cent in Q4, up from 5.9 per cent in the preceding quarter.

Reference To RBI Bulletin

The report also referenced the Reserve Bank of India’s (RBI) bulletin, which indicates that the economy has gained momentum in the second half of the fiscal year — a trend that is likely to continue. RBI’s nowcasting model estimates Q4 GDP growth at around 6.6 per cent .

Key drivers of this expected pickup include a resurgence in rural demand, steady government expenditure, and large public events such as the Mahakumbh, which media reports suggest could contribute significantly to nominal growth, with an estimated economic impact of Rs 2–3 lakh crore.

Meanwhile, the International Monetary Fund (IMF) has forecast India’s GDP to grow at 6.2 per cent in FY25 and 6.3 per cent in FY26, citing resilient private consumption as a major growth engine, even as global economic expansion slows to 2.8 per cent next year.