The Indian economy appears to have decelerated, with growth estimated to be in the range of 6 per cent to 7 per cent during the December quarter, down from a robust 7.6 per cent in the preceding quarter, according to economists.

The Statistics Ministry will release India’s GDP data for October-December 2023 on Thursday.

Economists have attributed factors ranging from lower industry and farm growth, because of uneven monsoon, to a slowdown in expenditure.

Rating agency Icra expects India’s GDP to grow 6 per cent in the third quarter (Q3), while State Bank of India sees a 6.8-7 per cent growth and the RBI 6.5 per cent growth in the quarter.

Icra said its projected GDP growth is likely to have moderated sequentially to 6 per cent in the third quarter from 7.6 per cent in the second quarter, mainly due to the subdued performance of agriculture and industrial sectors.

The GVA (gross value added) growth is estimated to ease to 6 per cent in the third quarter from 7.4 per cent in the second quarter, driven by industry (to 8.8 per cent from 13.2 per cent) and agriculture (0.5 per cent from 1.2 per cent) sectors, amidst an improvement in services (to 6.5 per cent from 5.8 per cent), according to the Icra report.

“The anticipated deterioration in the industrial sector growth in Q3 is partly attributable to an adverse base effect and a deceleration in volume expansion (IIP growth of 5.8 per cent in Q3 vs 7.8 per cent in Q2), even as continued deflation in commodity prices kept profitability of some sectors favourable,” Icra said.

The State Bank of India's (SBI) research 'Ecowrap' believes the GDP growth for the December quarter of the fiscal year 2024 is likely to be 6.8 per cent, assuming no changes to the base figures.

However, there is potential for it to reach 7 per cent in case of any downward revisions in the GDP growth figure for the third quarter of 2022-23. These revisions in the previous year's data could positively impact the current year's growth figures.

According to the SBI report, the Composite Leading Indicator (CLI) Index — a basket of 41 leading indicators that include parameters from almost all sectors — based on monthly data shows a slight moderation in economic activity in Q3. Factoring the slight decline, it estimates GDP should grow in the range of 6.7-6.9 per cent with a GVA growth of 6.6 per cent.