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Daily Tribune
7 hours ago
- Business
- Daily Tribune
India's annual growth hits 6.5%
India's economy grew by 6.5% in the fiscal year that ended in March, official data showed yesterday, among the world's top performers but still sluggish compared with its recent track record. Gross domestic product rose at its slowest pace in four years, with growth coming in well below the 9.2% recorded in the previous financial year. While the economy has rebounded over the past two quarters, helped in part by strong agricultural output, US President Donald Trump's tariff blitz poses risks to a sustained recovery. New Delhi, which wa s slapped with 26% reciprocal tariffs, is currently negotiating a trade deal with Washington that it hopes will spare it the worst of Trump's trade push. "Although India is expected to see its GDP grow 6.5% again in fiscal year 2025-26, there remains a great deal of uncertainty due to Trump's tariff policies," said Sam Jochim, an economist at EFG Asset Management. "The ability of the Modi government to strike a deal with Trump could prove paramount for India's economic outlook." Analysts believe the annual growth figures, along with cooling inflation data, will convince India's central bank to continue its interest rate easing cycle at its review meeting next week. The GDP figures released yesterday were slightly above analyst expectations of 6.3% but matched the government's own projections of 6.5% yearon-year growth. The data for the January-March quarter was brighter, with GDP growing 7.4% year-onyear -- the fastest this fiscal year and beating analyst estimates of 6.8% growth. The National Statistics Office said in a media release that growth in the March quarter was helped by a surging construction sector. Nearing Japan While India is still the fastest-growing major economy, the 2024-25 fiscal year growth figures remain below the 8% pace that experts say New Delhi needs to create enough wellpaying jobs and generate economic prosperity. The slowdown in economic activity over the past year pushed Prime Minister Narendra Modi's government into delivering $12 billion in income tax cuts this year, a move aimed at putting more money in the hands of millions of consumers. The Reserve Bank of India also cut interest rates in February for the first time in nearly five years and delivered another reduction in April. More recently, public debate over the country's economic ascent was triggered after a government official claimed India had surpassed Japan to become the world's fourth-largest economy. Projections by the International Monetary Fund, however, indicate that the switch will not happen until the end of this year. The claim nevertheless prompted swift self-praise from bosses of Indian companies and ruling party lawmakers. Experts also warned that the timeline for India beating out Japan could be delayed by fluctuations in exchange rates. "Our forecasts suggest that India will overtake Japan by the middle of 2026," Shilan Shah of Capital Economics said in a note this week. "But the big picture is that India was always going to overtake Japan -- and also Germany -- given its positive demographics and scope for continued productivity gains."
Indian Express
15 hours ago
- Business
- Indian Express
Indian economy grows faster than expected in fourth quarter. But near-term outlook remains unclear
The Indian economy grew at a robust 7.4 per cent in the fourth quarter of 2024-25, surpassing most expectations. Growth for the full year has now been pegged at 6.5 per cent by the National Statistics Office. This is in line with the office's earlier estimates. Strip away net taxes on products and value added by the economy grew by 6.8 per cent in the fourth quarter. Moreover, notwithstanding the sharp pick-up in growth in the second half of the year — the momentum slowed down sharply in the second quarter when growth collapsed to just 5.6 per cent — the Indian economy has actually slowed down significantly in 2024-25. Nominal GDP has also come in at less than 10 per cent. And forecasts for next year aren't much brighter. The sector-wise disaggregated data shows that agriculture continued to expand at a healthy pace, driven by favourable weather conditions and remunerative prices, which induced farmers to sow more area. Growth of 5.4 per cent in the fourth quarter has put the sector's growth for the full year at 4.6 per cent — higher than its long-term average. This bodes well for rural consumption. The industrial sector, though, slowed sharply, weighed down by manufacturing. The sector grew at just 4.5 per cent in 2024-25, down from 12.3 per cent the year before. Construction, however, continued to witness steady growth, expanding at 9.4 per cent in 2024-25, after growing by 10.4 per cent the year before. The services sector also witnessed a slight deceleration, with trade, hotels, transport and communication as well as the financial, real estate and professional services segments growing at a slower pace than before. The GDP data also show that private consumption grew at 7.2 per cent last year. This is difficult to reconcile with some of the commentary from India Inc, which, through the last year, voiced concerns over a softness in demand and a shrinking middle segment. There are also questions over the sustainability of the sharp pick-up in investments in the fourth quarter — gross fixed capital formation grew at 9.4 per cent as per the latest data. The near-term outlook is unclear. There is a possibility that lower commodity prices will impact the deflator in the coming quarters. Some analysts expect investment activity to be weighed down by the prevailing uncertainty. But a combination of tax cuts and lower interest rates could help support household consumption — there are expectations of the RBI's Monetary Policy Committee cutting interest rates further with inflation likely to stay in line with the central bank's target. But expectations for a strong pick-up this year remain muted. The central bank has pegged growth at 6.5 per cent in 2025-26 and the expectations of some analysts also range between 6.2 per cent and 6.5 per cent.
Hans India
16 hours ago
- Business
- Hans India
GDP growth at 4-yr low of 6.5% in FY25
New Delhi: India's economic growth slowed to 7.4 per cent in the January-March period and pulled down the annual growth rate for 2024-25 to a four-year low of 6.5 per cent, mainly due to the manufacturing sector, official data showed on Friday. The size of the Indian economy rose to Rs 330.68 lakh crore or about USD 3.9 trillion and set the stage for achieving the USD 5 trillion target in the next few years. In the previous 2023-24 fiscal year, the economy grew 9.2 per cent. China has registered an economic growth of 5.4 per cent in the first three months of 2025. The economic expansion was recorded at 7.4 per cent during January-March 2025, while it was 6.4 per cent in October-December 2024, 5.6 per cent in July-September 2024, and 6.5 per cent in the April-June quarter of the last financial year, according to economic estimates released by the National Statistics Office (NSO). The GDP had expanded by 8.4 per cent in the January-March quarter of 2023-24. The NSO, in its second advance estimate released in February, had projected the GDP growth for 2024-25 at 6.5 per cent. "Real GDP or GDP at Constant Prices is estimated to attain a level of Rs 187.97 lakh crore in FY2024-25, against the First Revised Estimates (FRE) of GDP for the FY 2023-24 of Rs 176.51 lakh crore, registering a growth rate of 6.5 per cent. "Nominal GDP or GDP at Current Prices is estimated to attain a level of Rs 330.68 lakh crore in the FY 2024-25 against Rs 301.23 lakh crore in FY 2023-24, showing a growth rate of 9.8 per cent," NSO said in a release. NSO further said that real GDP or GDP at Constant Prices in the fourth quarter of 2024-25 is estimated at Rs 51.35 lakh crore against Rs 47.82 lakh crore in the year-ago quarter, registering a growth rate of 7.4 per cent. Nominal GDP in Q4 of FY2024-25 is estimated at Rs 88.18 lakh crore against Rs 79.61 lakh crore in Q4 of 2023-24, showing a growth rate of 10.8 per cent. Real gross value added (GVA) is estimated at Rs 171.87 lakh crore in the FY 2024-25, against the FRE for the FY 2023-24 of Rs 161.51 lakh crore, registering a growth rate of 6.4 per cent. Nominal GVA is estimated to attain a level of Rs 300.22 lakh crore during FY 2024-25 against Rs 274.13 lakh crore in FY 2023-24, showing a growth rate of 9.5 per cent. On an annual basis, the growth in the key manufacturing sector decelerated to 4.5 per cent from 12.3 per cent in 2023-24. However, in the agriculture sector, the output increased to 4.6 per cent in 2024-25 compared to 2.7 per cent in the preceding fiscal. During the fourth quarter, the manufacturing sector output slowed to 4.8 per cent from 11.3 per cent in the year-ago quarter. The construction segment grew 10.8 per cent in the quarter from 8.7 per cent in the corresponding period of 2023-24. The agriculture sector growth accelerated to 5.4 per cent from 0.9 per cent in the final quarter of the last fiscal. The electricity, gas, water supply, and other utility services segment grew 5.4 per cent during the fourth quarter down from 8.8 per cent in the year-ago period. GVA growth in the services sector -- trade, hotel, transport, communication and services related to broadcasting -- is estimated at 6 per cent in the fourth quarter marginally, lower than 6.2 per cent a year ago. Financial, real estate and professional services grew 7.8 per cent in the March 2025 quarter compared to 9 per cent in the year-ago period. Public administration, defence and other services posted almost flat growth at 8.7 per cent in the quarter.
Time of India
20 hours ago
- Business
- Time of India
7.4% GDP growth in Jan-Mar pushes FY25 figure to 6.5%
Representative image NEW DELHI: India's economy grew faster than expected at 7.4% in the Jan-March quarter, led by robust growth in agriculture and construction. The strong quarterly showing - the fastest in the fiscal year - pushed overall growth in 2024-25 to 6.5%, according to data released by the National Statistics Office. The Jan-March figure outperformed the upwardly revised 6.4% in the Oct-Dec period, and pointed to robust momentum in the fourth quarter amid global uncertainty. India remained the fastest growing major economy in the March quarter, followed by China at 5.4% and Indonesia at 4.9%. The full-year growth estimate was in line with expectations and the second advance estimate, but the lowest in 4 years, on the back of 9.2% expansion in the previous year. Chief economic adviser V Anantha Nageswaran Friday said robust domestic demand has supported GDP growth and private consumption share has risen to the highest level since FY04. "Govt retains its outlook on FY26 growth at 6.3-6.8%, with private consumption, especially the rural rebound, and resilient services exports as the key drivers," Nageswaran said in a presentation after the data was released. Multiple agencies project India's growth to be in the range of 6.3-6.7% this year, he said. The Jan-Mar quarter data showed the farm sector remaining robust with growth of 5.4% while the construction sector grew 10.8% in the same period. The services sector remained steady at 7.3% in the March quarter compared with an expansion of 7.8% in the same year earlier quarter. The 6.5% growth for 2024-25 was attributed to a pickup in private consumption and investment while the acceleration in investment demand led to the sharp jump in the fourth quarter performance. "In line with expectations, real GDP registered 6.5% growth in fiscal 2025, elevating the Indian economy's size to $3.9 trillion from $3.6 trillion in fiscal 2024," said DK Joshi, chief economist at ratings agency Crisil. "Consumption growth outpaced GDP, primarily driven by robust rural demand supported by a strong agricultural sector. A sharp catchup in investment growth in the last quarter also brought investment growth above GDP growth. ... Net net we expect India's GDP to grow at 6.5% in fiscal 2026 with risks tilted downwards," said Joshi. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
21 hours ago
- Business
- Business Standard
India's GDP expands 7.4% in Q4 to meet annual growth estimates of 6.5%
India's economic growth rebounded to a four-quarter high of 7.4 per cent in the January-March period of 2024-25 (FY25), aligning with the annual growth estimate of 6.5 per cent, according to provisional estimates of gross domestic product (GDP) released by the National Statistics Office (NSO). The final-quarter performance outpaced expectations, beating both the Reserve Bank of India's (RBI's) forecast of 7.2 per cent and a Reuters poll of economists that had projected 6.7 per cent growth. Nominal GDP for the full financial year rose 9.8 per cent to ₹330.7 trillion, slightly above the ₹324.1 trillion estimated in the Union Budget. This boost helped the government perform marginally better on fiscal deficit, which stood at 4.77 per cent of GDP in FY25, against the revised estimate of 4.84 per cent. Gross value added (GVA) grew at a slower rate than GDP — at 6.8 per cent — in the March quarter, widening the gap between GDP and GVA due to a surge in net taxes (taxes minus subsidies), as government subsidy payouts contracted during the period. Now, economists believe uncertainty because of the tariff war triggered by US President Donald Trump's policies and weak urban demand will shape India's FY26 growth outlook, even as further policy rate cuts by the RBI will support economic recovery. 'The momentum of the economy, which picked up in the fourth quarter, is continuing into the first quarter (of FY26), and that's a good sign,' said V Anantha Nageswaran, chief economic advisor in the finance ministry, while briefing reporters after the release of GDP data. He said high-frequency indicators for April showed strong industrial and commercial activity, and noted that interest rate moderation and recent tax relief measures would likely support consumption. Sakshi Gupta, principal economist at HDFC Bank, noted that while FY25 GDP growth moderated from the previous year's 9.2 per cent, the economy recovered from the sluggish performance in the first half of FY25. 'Average growth for H2 stood at 6.9 per cent versus 6.1 per cent in H1FY25. Growth in the second half was supported by a rise in government capex and construction activity, healthy agriculture performance, and continued momentum in the service sector,' she said. Agriculture grew 5.4 per cent in the March quarter, buoyed by strong reservoir levels and robust rabi sowing. Manufacturing expanded 4.8 per cent — a three-quarter high rate — helped by subdued input cost inflation. The labour-intensive construction sector surged 10.8 per cent, marking a six-quarter high. The services sector expanded 7.3 per cent, with public administration, defence, and other government services leading the way with 8.7 per cent growth. However, segments like trade, transport, communication, and broadcasting recorded slightly slower growth at 6 per cent, down from 6.2 per cent a year earlier, despite the festival boost from events like the Mahakumbh. Financial, real estate, and professional services also slowed to 7.8 per cent from 9 per cent in the same quarter a year ago, possibly reflecting weaker credit and deposit growth. Public sector-driven services remained strong, as both central and state governments pushed to accelerate projects in the final three months of FY25. Net exports turned positive in the March quarter after three consecutive quarters of drag. 'The 8.3 per cent growth in exports in FY25 was mainly due to better performance of services, given that exports of goods were virtually flat,' said Madan Sabnavis, chief economist, Bank of Baroda. On the supply side, private final consumption expenditure growth moderated to 6 per cent, while government consumption spending declined 1.8 per cent, partly due to the high base of a year ago. Investment demand, measured through gross fixed capital formation, rose by 9.4 per cent in the March 2025 quarter. 'The seasonal rush by both Union and state governments to meet their capex targets, along with the private sector (there has been an increase in capex intentions based on the latest NSO survey data), appears to have provided succour to the investment demand in Q4FY25,' said Paras Jasrai, associate director, India Ratings. 'The pickup in investment demand is significant but needs to be watched for a sustainable trend in view of economic uncertainty and weak foreign investment demand as indicated by the net FDI inflow.' Rajani Sinha, chief economist, CareEdge Ratings, said the uneven pace of consumption recovery remained a key 'monitorable'. 'The strength in rural demand is expected to continue on the back of favourable monsoon prospects, healthy reservoir levels and upbeat agricultural output. However, the softness in urban demand continues to be an area of concern,' she said. Sinha also warned that despite the US placing reciprocal tariffs on hold for 90 days, global economic uncertainty was likely to persist. 'This is likely to weigh on the private investment impulses. Given this context, a broadbased and durable consumption recovery, along with a revival in the government's capex, becomes increasingly critical for a revival in the private capex cycle. Factoring all of these aspects, we expect GDP growth in FY26 to be 6.2 per cent,' she added.
