India’s GDP may have increased by 7% in the fourth quarter FY25. Current fiscal year GDP settled 6.3%: Report
According to a recent report by ICICI Bank, the Indian economy is estimated to grow 7% in the fourth quarter of 2025.
According to the ICICI Bank report, this marks a stronger growth momentum in the second half of the fiscal year compared with the first half of the year, led to increased government spending and collection of rural demand, domestic travel and service exports.
“In the 25th quarter, we expect GDP growth to be 7%, much higher than GVA. This should bring overall GDP growth to fiscal 25,” the report noted.
It stressed that compared with the first half of the year, India’s growth momentum occupied H2 in the second half of the year. A key reason for this is the increase in rural demand, supported by strong agricultural production. Construction activities remained stable.
So far, urban demand has been weak, although it is expected to improve gradually, especially with the potential implementation of the new compensation committee.
In terms of quantity, the report estimates the total value-added (GVA) of Q4FY25 at 6.4%, while the GDP growth rate is 7%.
The difference between GVA and GDP is due to higher net taxes. A similar pattern was observed in the fourth quarter of last year, with GVA growth rate of 7.3%, while GDP growth was significantly higher than 8.4%.
Throughout the fiscal year 2025, PEGS GDP growth rate was 6.3%. This is slightly lower than the government’s current estimate of 6.5% in the second advance estimate (SAE).
The report notes that the trend of lower subsidies, especially due to lower energy prices, may continue until FY26 and support economic growth.
The bank also said that the main drivers of major growth are unlikely to change in the near future, and rural areas are expected to perform better again, which is a help from the upper monsoon. Continued government spending is also expected to grow further.
However, exports are still a problem. Although India’s commodity exports to the United States rose 27% year-on-year in April, this rate is unlikely to be maintained in the coming months. Still, lower oil prices are expected to be a positive factor.
India’s temporary gross domestic product (GDP) for the fourth quarter and fiscal year (FY25) is likely to be released within a few days.
