The growth of India’s economic activity witnessed a remarkable improvement to an eight-month high of 10.1 per cent in October 2024 from 6.6 per cent in September, despite an unfavourable base, according to a report by credit rating agency ICRA.
Factors like base-effect led rise in electricity demand growth and a continued festive boost in vehicle registrations strengthens ICRA’s outlook for India's GDP growth in Q3 FY2025
The growth of India’s economic activity witnessed a remarkable improvement to an eight-month high of 10.1 per cent in October 2024 from 6.6 per cent in September, despite an unfavourable base, according to a report by credit rating agency ICRA.
These numbers add optimism to the early data of November 2024. Factors like base-effect led rise in electricity demand growth and a continued festive boost in vehicle registrations further strengthen ICRA’s outlook for the GDP growth in Q3 FY2025 as compared to H1 FY2025.
The economic activity growth was led by improvement in 10 of the 16 indicators including electricity generation, mining activity, healthy demand during the festive season, vehicle registrations, consumption of petrol and diesel, air passenger traffic, and the surge in India’s exports.
As per the Vahan data quoted by ICRA, the average daily vehicle registrations jumped to 108.4k units during November 1-18 this year, surpassing the full-month average of 96.4k units (previous peak) as well as 92.0k units, respectively, in November 2023 and October 2024.
“The daily average registrations will normalise by the end of the month. Besides, electricity demand growth improved to 3.2% during November 1-17, 2024 from 1.1% in October 2024, partly supported by a favourable base,” the ICRA said in its report.
The performance of most auto, mobility, and transport-related indicators also showed remarkable growth during the festive season. Vehicle registrations surged to 32.4 per cent from 8.7 per cent, supported by growth in two-wheeler and passenger vehicles.
The report added that petrol consumption also rose sharply to 8.7 per cent from 3 per cent, while domestic air passenger traffic increased to 9.6 per cent from 6.4 per cent. Additionally, non-oil exports jumped from 6.8 per cent to 25.6 per cent in September 2024, driven by strong performance in sectors like chemicals, readymade garments, electronic goods, and others.
Other indicators demonstrated a rebound like Coal India Limited's (CIL) output improved to +2.3 per cent from -1.0 per cent and electricity generation recovered to +0.2 per cent from -1.6 per cent, marking a return to year-on-year growth after contractions in September.
The growth momentum in GST e-way bills moderated slightly to16.9 per cent from +18.5 per cent and finished steel consumption eased to +9.0 per cent from +10.5 per cent, both indicators maintained strong levels of expansion.