India's Q4FY25 GDP Growth Surges to 7.4%: A Robust Economic Turnaround
India's GDP growth in the fourth quarter of FY25 reached a 4-quarter high of 7.4%, surpassing expectations and outpacing the previous quarter's 6.4% growth. Key sectors like construction, public administration, and finance drove this robust economic performance.
Gdp GrowthIndian EconomyConstructionAgriculturePrivate ConsumptionReal EstateMay 31, 2025
The GDP rate, however, remains below the 8.4% recorded in the same period last year. Nominal GDP increased by 10.8% year-on-year, indicating a steady economic expansion. According to provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) on May 30, India’s economy is projected to grow at 6.5% in real terms in the financial year 2024-25, with nominal GDP expected to expand by 9.8%.
Construction was a major driver of growth, with an annual rise of 9.4%. This sector saw a significant surge of 10.8% in Q4 alone, highlighting continued momentum in infrastructure and housing activity. Public administration, defense, and other services also contributed significantly, growing by 8.9%, while financial, real estate, and professional services saw a 7.2% increase.
Agriculture and allied activities witnessed a healthy turnaround, growing by 4.4% in FY 2024-25 compared to 2.7% in the previous year. In Q4, agriculture growth reached 5.0%, a substantial improvement from just 0.8% in the same period last year. This growth is a positive indicator of the sector’s resilience and the effectiveness of government policies.
Private consumption and investments also showed strength. Private Final Consumption Expenditure (PFCE) grew by 7.2% during the fiscal year, up from 5.6% in FY 2023-24. Gross Fixed Capital Formation (GFCF), a key indicator of investment, increased by 7.1% annually and a robust 9.4% in Q4. These figures suggest a growing confidence in the economy and a positive outlook for future investments.
Real Gross Value Added (GVA) is estimated at Rs 171.87 lakh crore in FY 2024-25, marking a 6.4% increase from the revised estimate of Rs 161.51 lakh crore for FY 2023-24. Nominal GVA is expected to reach Rs 300.22 lakh crore, up 9.5% from Rs 274.13 lakh crore last year. These figures underscore the broad-based nature of the economic recovery.
Sakshi Gupta, an economist at HDFC Bank, noted, “A higher-than-expected growth indicates that the economy has recovered from the slowdown seen in the middle of last year. Given global headwinds, the central bank is expected to remain growth supportive and cut rates by a quarter-point in its next meeting.” This sentiment reflects the positive outlook for the Indian economy amidst global economic challenges.
The Q4 GDP and GVA figures show strong year-on-year gains. Real GDP or GDP at constant prices in Q4 of FY 2024-25 is estimated at Rs 51.35 lakh crore, up from Rs 47.82 lakh crore in Q4 of FY 2023-24, registering a growth rate of 7.4%. Nominal GDP or GDP at current prices during the same quarter is estimated at Rs 88.18 lakh crore, compared to Rs 79.61 lakh crore in the corresponding period last year, showing a growth rate of 10.8%.
Similarly, real Gross Value Added (GVA) in Q4 of FY 2024-25 is estimated at Rs 45.76 lakh crore, against Rs 42.86 lakh crore in Q4 of FY 2023-24, recording a growth rate of 6.8%. Nominal GVA for the quarter stood at Rs 79.46 lakh crore, up from Rs 72.51 lakh crore last year, reflecting a growth of 9.6%.
Frequently Asked Questions
What was India's Q4FY25 GDP growth rate?
India's Q4FY25 GDP growth rate was 7.4%, which is a 4-quarter high and surpasses the previous quarter's 6.4% growth.
Which sector showed the highest growth in Q4FY25?
The construction sector showed the highest growth in Q4FY25, with an annual rise of 9.4% and a significant surge of 10.8% in Q4 alone.
How did agriculture perform in Q4FY25?
Agriculture and allied activities grew by 4.4% in FY 2024-25, with a Q4 growth rate of 5.0%, a substantial improvement from 0.8% in the same period last year.
What is the projected GDP growth for FY 2024-25?
India’s economy is projected to grow at 6.5% in real terms in the financial year 2024-25, with nominal GDP expected to expand by 9.8%.
What factors contributed to the strong GDP growth in Q4FY25?
Key factors contributing to the strong GDP growth in Q4FY25 include robust performance in construction, public administration, finance, and a significant increase in private consumption and investments.
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