India’s economy delivered a pleasant surprise with its Q4 GDP growth clocking in at 7.4%, significantly exceeding market expectations. The data, released after market hours on May 30th, shows the country’s strong finish to the financial year and positions India to retain its status as the world’s fastest-growing major economy.
Muted Market, But Big Data
On May 30th, the stock market remained relatively quiet with a modest 80-point decline. There was no major bullish or bearish movement, and this was expected, as investors awaited the GDP data announcement scheduled after market hours.
Since the GDP data was released post 3:30 PM on a Friday, and the markets are closed over the weekend, the full impact of this significant economic news will be reflected on Monday. That trading session is expected to be a high-action day, potentially with a gap-up opening.
India’s GDP: A Quarter-by-Quarter Breakdown
The GDP data for Q4 (January to March 2025) came in at 7.4%, beating all analyst expectations. Here's a breakdown of how India performed across the four quarters of FY24:
| Quarter | Forecast (%) | Actual (%) |
|---|---|---|
| Q1 | 6.9 | 6.7 |
| Q2 | 6.5 | 5.4 |
| Q3 | 6.3 | 6.2 |
| Q4 | 6.7 | 7.4 |
The first three quarters consistently underperformed their respective forecasts. However, Q4’s strong recovery lifted the overall GDP growth for FY24 to 6.5%, preventing it from falling below the 6% mark.
Key Takeaways from the GDP Data
A 7.4% GDP growth indicates a strong demand for goods and services, showcasing solid economic performance.
The Indian market is driven by global investors such as FIIs, FPIs, and FDIs. GDP growth is a key indicator they monitor closely.
Among global economies, India remains the fastest-growing major economy. Here's a comparison:
USA: Around 2.5%
China: Around 4.5 to 5% (though some global analysts question the accuracy of China's data)
Germany, France, Japan, UK: Around 1-2% or even lower
India: FY24 GDP growth stands at 6.5%
This puts India ahead of the pack and makes it a top investment destination.
After the GDP data release, GIFT Nifty futures showed a noticeable uptick, signaling that Monday could open with a strong positive sentiment.
Markets often fall on mere rumors, but need strong data to rise — this GDP report offers that needed boost.
A Note of Caution: Inconsistency in Growth
While Q4's numbers are impressive, the inconsistency across quarters is a point of concern. India saw a significant drop in growth in Q2 and a weaker-than-expected performance in Q3. To become a developed nation by 2047, India needs to consistently post GDP growth rates of 7-8% or higher.
This quarter’s performance offers temporary relief, but the focus must shift toward sustaining high growth across all future quarters.
India’s 7.4% GDP growth in Q4 FY24 is a significant achievement, especially when global economies are struggling. It reinforces investor confidence, both domestic and foreign, and highlights the Indian economy’s resilience.
With the data release happening post-market on a Friday and no trading over the weekend, all eyes will be on Monday’s market session, which could open with positive momentum. However, for long-term confidence, India must work toward maintaining consistency in its growth rate.
This latest GDP figure has once again proven that India is not just holding ground but leading the way among global economies.
Disclaimer:
The content provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Market performance and economic forecasts are subject to change based on a variety of factors. Readers are advised to conduct their own research or consult with a qualified financial advisor before making any investment decisions
