Strongest Growth in Five Quarters
India’s economy grew at a robust 7.8% year-on-year in the quarter ending June 2025, surpassing analysts’ projections of around 6.6%. This is the sharpest growth rate in five quarters, signaling a strong momentum in Asia’s third-largest economy.
Key Drivers of Growth
- Private Consumption: Household demand surged by 7%, supported by easing inflation and improved purchasing power.
- Government Spending: Public expenditure expanded by 7.4%, providing an additional boost to domestic demand.
- Investment Growth: Gross fixed capital formation, an indicator of infrastructure and business investment, jumped 7.8%.
External Trade Pressure
Despite strong domestic growth, external trade weighed on GDP. Imports surged by 10.9% annually, driven by consumer and industrial demand, while exports expanded by just 6.3%. This led to a negative net external demand contribution to GDP.
Economic Outlook
The latest data highlights India’s resilience, extending the recovery phase after a slowdown in 2024. Economists believe that with continued support from consumption, infrastructure investment, and easing inflation, India is well-positioned to remain the world’s fastest-growing major economy in 2025.
Disclaimer:-This article is based on official data released by the Ministry of Statistics and Programme Implementation (MOSPI). It is intended for informational purposes only and should not be considered as financial or investment advice.