India's Q4 GDP hits 7.4%—but FY25 growth at 4-year low
What's the story
India's economy grew at a four-quarter high of 7.4% in the January-March period, government data released on Friday showed. The figure is higher than a Moneycontrol poll estimate of 6.9% for the quarter. The growth rate also surpassed the previous quarter's rate of 6.4%, but was lower than the fourth-quarter growth rate of 8.4% in FY23. The Q4 surge was driven by strong performances in the construction and services sectors, along with increased rural demand and government spending.
Annual performance
Full-year growth for FY25 at 6.5%
For the entire fiscal year of 2024-25, India's GDP growth was recorded at 6.5%, a four-year low. In the full fiscal year of 2023-24, it stood at a revised high of 9.2%, up from an initial estimate of 8.2%. Despite the dip, India retains its status as the world's fastest-growing major economy, with projections to become the fourth-largest globally by the end of 2025.
Economic forecast
Q4 FY25 growth surpasses estimates
Analysts had projected India's economic growth for the fourth quarter of FY25 between 6.4% and 7%. The latest data indicates that the country's economy has outperformed these expectations, indicating a strong performance in this period. Despite global uncertainties, economists believe that India's growth momentum will be sustained in the coming fiscal year (FY26). Chief Economic Advisor V. Anantha Nageswaran emphasized the need for businesses to boost capital expenditure and ensure equitable worker compensation to sustain growth above 6.5%.