India's Jan-March GDP growth likely to rebound to 6.8%, says expert

India's economy

is expected to post a rebound in the January-March 2025 quarter, with

projected at 6.8% year-on-year, according to

, chief economist for India, Malaysia, and South Asia at

This estimate, ahead of the official GDP release on May 30, marks a recovery from the 5.6% growth recorded during the July-September 2024 quarter and an uptick from 6.2% in the October-December period.

Real Gross Value Added (GVA) is forecast to grow at 6.5% in Q4 FY25, slightly trailing GDP growth. Das attributes the GDP-GVA divergence to a sharp 44% drop in subsidy disbursements compared to the same quarter last year. "This contraction in subsidies is expected to significantly boost net tax collections, thereby lifting GDP growth above GVA growth," he said.

While Deutsche Bank's forecast aligns with Bloomberg's consensus estimates—6.8% for GDP and 6.4% for GVA—Das issued a word of caution. "Quarterly data often undergoes revision, sometimes substantially, so there's potential for surprises in the final print"

High-frequency indicators show strength
Deutsche Bank's India Macroeconomic Momentum Indicator (IMMI), which tracks five key metrics including industrial production and bank credit, supports the 6.8% GDP growth projection. The broader Composite Leading Indicator (CLI), built from around 65 high-frequency indicators, also points to similar economic momentum.

Das noted that inflation has also played a role in improving the real growth outlook. With Consumer Price Index (CPI) inflation averaging 3.7% and Wholesale Price Index (WPI) at 2.3% in Q4, the GDP deflator is expected to drop to 3%—down from 3.8% in the previous quarter—potentially pushing real GDP growth past the 7% mark. Nominal GDP growth is projected at approximately 10% for the quarter.

Policy backing and long-term outlook
According to Das, government and the Reserve Bank of India are "doing whatever it takes" to support economic growth. He credited strong fiscal-monetary coordination and sustained structural reforms over the past decade for keeping India on track to remain the world’s fastest-growing major economy.

"These efforts are making India an attractive destination for global investment, particularly as multinationals reconfigure supply chains to tap into the country’s scale and market potential," Das added.

The Central Statistics Office (CSO) had earlier raised its FY25 growth projection to 6.5%, assuming an ambitious 7.6% GDP expansion in the March quarter—a figure many initially deemed too optimistic. But with data now showing a steep fall in subsidies and softer inflation, a 7%+ growth rate looks increasingly plausible.