India's Q4 GDP Growth At Four-Quarter High Of 7.4%; GVA Grows 6.8%

India's economic activity continued to improve despite a rise in divergence between the gross domestic product and gross value added.

The GDP growth rate rose to a four-quarter high of 7.4% in the January-March period, according to the latest estimates released by the government's statistical office on Friday.

This was compared to a revised estimate of 6.4% for the October-December quarter.

The GVA, excluding indirect tax and subsidies, rose 6.8% during the fourth quarter, compared to the estimate of 6.5% in the preceding quarter.

For the full year, GDP is estimated to have grown by 6.5%, which is the same as compared to the second advance estimate of 6.5%—the lowest in four years.

GDP was estimated to grow by 6.8% in the fourth quarter, according to economists polled by Bloomberg. GVA growth was pegged at 6.4%.

“The Q4FY25 GDP numbers are marginally higher than our expectations but broadly tracking the government's earlier estimate, while the GVA estimate remains more tepid at 6.8%," said Upasna Bhardwaj, chief economist at Kotak Mahindra Bank. Expectedly, the high net indirect tax growth has led to the wide gap between the two.

The high frequency data in the last few months continues to point towards a patchy recovery, with the sequential momentum suggesting moderation compared to the previous quarter, Bhardwaj said. However, benign inflation and soft growth are expected to continue to provide the RBI's Monetary Policy Committee room for incremental monetary easing, with 25 basis points cut in the upcoming June policy.

Here are the key highlights from India's GDP data:

Q4 FY25: By Industry (Y-o-Y)

• Agriculture grew 5.4% in Q4, compared with 6.6% in Q3.

• Mining rose 2.5% as against 1.3% in the previous quarter.

• Manufacturing expanded 4.8% as against 3.6% in the preceding quarter.

• Electricity and other public utilities increased 5.4% versus 5.1% in Q3.

• Construction rose 10.8% in Q4, as compared with 7.9% in Q3.

• Trade, hotel, transport, and communication expanded 6%, as compared with 6.7% over the previous quarter.

• Financial services sector rose 7.8% as against 7.1% in Q3.

• The public administration segment increased 8.7%, as compared with 8.9% in Q3.

Q4 FY25: By Expenditure (Y-o-Y)

• Private final consumption expenditure rose by 6% versus 8.1% in Q3.

• Government final consumption expenditure contracted by 1.8% compared with 9.3% in Q3.

• Gross fixed capital formation rose by 9.4% versus 5.2%.