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Key Points

According to a recent ICICI Bank report, India's GDP likely grew by 7% in the fourth quarter of the fiscal year 2025, outpacing expectations and bringing the projected annual growth to 6.3%. Factors fueling this growth include increased government expenditure, a surge in rural demand, and improvements in domestic travel and service exports. Despite these gains, challenges like weak urban demand and fluctuating exports remain concerns for sustained economic progress. The report anticipates continuous support from government policies and an above-average monsoon to further bolster future growth.

Key Points: India's Q4FY25 GDP Grows 7% Exceeding Expectations Report

  • India's GDP growth driven by govt spending and rural demand
  • FY25 GDP to settle at 6.3%
  • Challenges in exports remain despite optimistic outlook
3 min read

India's GDP likely grew by 7% in Q4FY25; current fiscal year GDP to settle at 6.3%: Report

ICICI Bank report shows India's Q4FY25 GDP growth at 7%, boosting annual projections to 6.3%.

"In Q4FY25, we expect GDP growth at 7 per cent, which is much higher than GVA. - ICICI Bank Report"

New Delhi, May 29

India's economy is estimated to have grown by 7 per cent year over year in the fourth quarter of the financial year 2025, according to a recent report by ICICI Bank.

As per the ICICI Bank report, this marked a stronger growth momentum in the second half of the financial year compared to the first half, powered by a rise in government spending and a pick-up in rural demand, domestic travel and services exports.

The report stated, "In Q4FY25, we expect GDP growth at 7 per cent, which is much higher than GVA. This should take overall GDP growth for FY25 to 6.3 per cent."

It highlighted that India's growth momentum picked up in H2, the second half of the financial year compared with the first half. One key reason for this is the increase in rural demand, supported by strong agricultural production. Construction activity has also remained steady.

Urban demand has been weak so far, though it is expected to improve gradually, especially with the potential implementation of the new Pay Commission.

In terms of numbers, the report estimates Gross Value Added (GVA) growth for Q4FY25 at 6.4 per cent, while GDP growth is seen higher at 7 per cent.

The difference between GVA and GDP is due to higher net taxes. A similar pattern was observed in Q4 last year, where GVA growth stood at 7.3 per cent, while GDP growth was significantly higher at 8.4 per cent.

For the full financial year 2025, the report pegs GDP growth at 6.3 per cent. This is slightly lower than the government's current estimate of 6.5 per cent in the Second Advance Estimates (SAE).

The report noted that the trend of lower subsidies, especially due to reduced energy prices, is likely to continue into FY26 and support economic growth.

The bank also said that the main drivers of growth are unlikely to change in the near future, with rural areas expected to perform better again, helped by an above-normal monsoon. Continued government spending is also expected to boost growth further.

However, exports remain a concern. While India's goods exports to the United States rose 27 per cent year-on-year in April, this pace is unlikely to be sustained in the coming months. Still, lower oil prices are expected to be a positive factor.

India's Provisional Gross Domestic Product (GDP) for the fourth quarter and Financial Year (FY25) are likely to be released with a few days.

- ANI

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Reader Comments

R
Rajesh K.
Good to see rural demand picking up! Our farmers are the backbone of India's economy. Hope this growth translates to better prices for crops and more jobs in villages. The monsoon forecast looks promising too 🙏
P
Priya M.
While 7% looks impressive, I'm concerned about urban demand being weak. As someone working in retail, we're seeing fewer customers than pre-pandemic levels. Hope the Pay Commission changes bring some relief to middle-class spending power.
A
Amit S.
Construction sector steady growth is excellent news! This creates so many jobs for skilled and unskilled workers alike. Hope the government continues infrastructure projects at this pace. #VikasKaSankalp
S
Sunita R.
The export situation worries me. We can't just depend on domestic demand forever. Need to make Indian products more competitive globally. Maybe time to focus more on quality than just quantity?
V
Vikram J.
Lower oil prices helping the economy is temporary relief. We need long-term solutions - more renewable energy, better public transport. Our growth should be sustainable, not dependent on global oil markets!
N
Neha T.
As a small business owner, I'm seeing more customers from tier 2 cities than metros. Maybe the real growth story is in Bharat, not just India? 😊 Happy to see rural economy bouncing back!

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