India's Economy Surges: Q4FY25 Growth at 7%

In the fourth quarter of the financial year 2025, India's economy showcased robust growth, expanding by 7% year over year, as reported by ICICI Bank. The latter half of the fiscal year saw a stronger economic momentum, fueled by a surge in government expenditure and an upswing in rural demand, as well as a revival in domestic travel and service exports.

The report detailed expectations for a 7% GDP growth in Q4FY25, exceeding Gross Value Added (GVA) figures. Consequently, the total GDP growth for FY25 is projected at 6.3%. The economic resurgence in the latter half of the fiscal year is attributed to heightened rural demand, supported by solid agricultural output, while construction activities stayed steady.

Urban demand remains sluggish but is anticipated to improve, potentially boosted by a new Pay Commission. For Q4FY25, GVA growth is estimated at 6.4%, in contrast to a higher GDP growth of 7%. The disparity is attributed to increased net taxes. Compared to last year's Q4, where GVA grew by 7.3% and GDP by 8.4%, the final FY25 GDP is predicted slightly below the government's 6.5% forecast from the Second Advance Estimates.

The report highlights that lower subsidies, especially due to falling energy prices, are likely to persist into FY26, supporting economic growth. Rural areas are expected to continue outperforming, aided by an above-normal monsoon, with government spending further bolstering the economy.

However, exports pose a concern. While India's goods exports to the United States surged by 27% in April compared to the previous year, sustaining this pace seems challenging. Yet, declining oil prices may provide an economic boost. India's Provisional GDP figures for Q4 and FY25 will be announced shortly. (ANI)

(With inputs from agencies.)