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India’s GDP Growth Slows to 6.5% in FY25, Q4 Expands 7.4% Against Forecasts

Easing inflation paired with strong forex reserves is prompting a likely June rate reduction by the RBI ahead of India’s projected leap to the fourth-largest global economy

A Reserve Bank of India (RBI) logo is seen inside its headquarters in Mumbai, India, April 6, 2023. REUTERS/Francis Mascarenhas/ File Photo
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Overview

  • Official National Statistics Office data show GDP grew 6.5% in FY25, the slowest pace in four years but still the highest among major economies
  • Economic activity accelerated to 7.4% in the January–March quarter, outpacing estimates and up from 6.2% in Q3
  • Rural consumption and government spending fueled gains in construction, which rose 10.8%, and a 5.4% jump in agriculture output in Q4
  • Private final consumption expenditure climbed 7.2% in FY25 as retail inflation eased to near six-year lows in April
  • Economists expect the RBI to cut its repo rate in June and the IMF forecasts India will surpass Japan’s $4.18 trillion economy in FY26