FY25 ECONOMIC GROWTH SLOWS TO 6.5% BUT BEATS ESTIMATES: GDP growth at 4-yr low

Q4 expansion at 7.4% on strength of exports, construction and investments

- MUKESH JAGOTA

INDIA'S ECONOMIC GROWTH fell to 7.4% in the fourth quarter of 2024-25, from 8.4% in the year-ago quarter, as manufacturing, private and government consumption, and key services slowed, according to provisional estimates released by the National Statistics Office (NSO) on Friday.

For the whole of FY25, the GDP expansion slowed to a four-year low of 6.5%, compared with 9.2% in the previous year.

The latest quarterly GDP was still better than analyst estimates, which hovered around 6.8-6.9%, and came almost in line with the NSO's second advance estimates published on February 28. An upward revision of Q3FY25 GDP growth from 6.2% to 6.4% helped the annual economic expansion to be the same as in second advance estimates.

A solid pick-up in construction, a steady primary sector and a rare and big push from "net exports", which accounted for 3.7% of GDP, helped the Q4 growth rate beat estimates.

The Q4 GDP also got a boost from net indirect taxes—the gross value added (GVA), a better indicator of economic momentum, grew at a lower rate of 6.8% in the quarter.

During FY25, private consumption raised its share in the GDP marginally to 56.5% from 56.1% in the previous year. But the growth of this largest component of the economy fell both annually and on a sequential basis in the fourth quarter. High-frequency indicators in the current quarter reflect only a further downslide thereafter.