Maha Kumbh to drive consumption demand in Q4 FY25, boosting hospitality, trade, and transport Sectors: CareEdge

The report added that the economic momentum will rebound in the coming quarters, supported by factors such as recovering rural demand, lower taxes, policy rate cuts, falling food inflation, and increased public capital expenditure.

"Festivities amidst 'Maha-Kumbh' celebrations in Q4 should also support consumption demand and sectors such as trade, hotel and transport," the report added.

There has been an improvement in the private consumption demand in the rural centers, as revealed by the GDP data released on Friday.

India's GDP growth for the third quarter stood at 6.2 per cent, reflecting a significant improvement compared to the 5.6 per cent growth recorded in Q2 FY25.

In terms of the sectors, agriculture growth continued to recover, growing at 5.6 per cent YoY in Q3, higher than the 4.1 per cent growth witnessed last quarter. Agricultural activities were aided by robust Kharif output growth and healthy Rabi sowing growth.

The services sector, too, maintained its broad momentum, growing at 7.4 per cent YoY in Q3, higher than Q2 growth of 7.2 per cent. The improvement in the growth of the services sector was on the back of higher growth of trade, hotels, transport, communication & broadcasting services, which jumped from 6.1 per cent in Q2 to 6.7 per cent in Q3.

Further the report added in its outlook that consumption demand is expected to strengthen as the inflationary pressures ease and the benefits of lower taxes kick in.

The Reserve Bank of India (RBI) has already cut the policy repo rate by 25 basis points in February, with further cuts of 25-50 basis points expected in FY26, which should support private capex and demand, the report added.

However, the report highlights that the global uncertainties, including trade tensions, geopolitical risks, and weather events, remain potential risks for the Indian economy. (ANI)