Q4FY25 GDP growth at 7.4% beats expectations
India’s GDP growth accelerated to a four-quarter high of 7.4% YoY in Q4FY25, up from a revised 6.4% in Q3, surpassing market expectations but slightly trailing the implied Q4 figure as per the CSO’s second advance estimate of 7.6%. This robust performance was driven by strong investment demand—evident in Gross Fixed Capital Formation growth (+9.4%) and record-high quarterly net exports—partly offset by lower-than-expected expansion in private consumption and slower (15-quarter low) growth in government spending. Rural demand showed resilience while urban demand indicators remained muted. On the supply side, Gross Value Added (GVA) rose by 6.8% YoY in Q4FY25, led by a broad-based expansion across Agriculture, Industry and Services. The provisional estimate for FY25 GDP growth has been retained at 6.5%, underpinned by strong private consumption, investment and services exports. Notably, GDP revisions have been minimal, with only a marginal upward revision in Q3FY25 GDP growth (+20bps to 6.4%). Nominal GDP growth for FY25 came in at a four-year low of 9.8%.