India’s economy expanded by 7.4% in the fourth quarter (January–March) of fiscal year 2024–25 (FY25), surpassing market expectations. However, the full-year growth rate slowed to 6.5%, marking the lowest annual growth since the COVID-19 pandemic period.
Quarterly Performance: Q4 FY25
The 7.4% GDP growth in Q4 FY25 indicates a resilient economic performance, driven by robust activity in key sectors. This growth exceeded many analysts’ forecasts, reflecting strong domestic demand and favorable external conditions.
Annual Overview: FY25
Despite the strong Q4 performance, the overall GDP growth for FY25 decelerated to 6.5%, a significant drop from the 9.2% growth recorded in FY24. This slowdown is attributed to factors such as high inflation, global economic uncertainties, and tighter monetary policies. The Economic Times
Sectoral Contributions
- Manufacturing: The manufacturing sector showed signs of recovery, contributing positively to the GDP growth in Q4.
- Services: The services sector remained a key driver of growth, with strong performances in finance, real estate, and professional services.
- Agriculture: Agricultural output remained stable, supporting rural incomes and consumption.
Outlook
The better-than-expected Q4 growth provides a positive outlook for the Indian economy. However, sustaining this momentum will require continued policy support, investment in infrastructure, and measures to boost consumer confidence.
