- By Ajeet Kumar
- Fri, 30 May 2025 06:57 PM (IST)
- Source:JND
India's GDP growth accelerated to a robust 7.4 per cent in the fourth quarter of 2024-25, as a result of which the growth rate for the full financial year works out to 6.5 per cent on the back of a strong performance of agriculture, construction, and services sectors, official data released on Friday showed. As India's economy cleared for takeoff at 7.4 per cent; Pakistan stuck in pre-flight security check. As of May 2025, Pakistan's economic growth for the fiscal year 2024–25 is projected to be modest, with estimates ranging from 2.6 per cent to 2.8 per cent.
India's growth rate is reaching a new height
Meanwhile, India's agriculture sector recorded a 4.6 per cent growth rate during 2024-25, up from 2.7 per cent in 2023-24 when an erratic monsoon had damaged crops. During Q4, FY 2024-25, the growth rate of the agriculture sector jumped to 5 per cent compared to 0.8 per cent in Q4 of the previous financial year, figures compiled by the Ministry of Statistics showed. The construction sector is estimated to have registered an impressive growth rate of 9.4 per cent in FY 2024-25, followed by an 8.9 per cent growth rate in the "Public Administration, Defence & Other Services' sector while the "Financial, Real Estate & Professional Services' sector posted a 7.2 per cent growth for the financial year.
India's construction sector sees double-digit growth
During Q4 of FY 2024-25, the construction sector recorded double-digit growth of 10.8 per cent, followed by an 8.7 per cent growth rate in the "public administration, defence & other services' sector. The "financial, real estate & professional services' sector registered a growth of 7.8 per cent in the fourth quarter. Reflecting the strong demand in the economy, private final consumption expenditure recorded a 7.2 per cent growth rate in FY 2024-25 as compared to a 5.6 per cent growth rate in the previous financial year. This was driven in large measure by rural demand for goods and services shot up due to higher incomes in the agriculture sector.
India continues to be the fastest-growing economy
Apart from the strong performance of the agriculture sector, the massive investments by the government in big ticket infrastructure projects such the highways, railways, ports and airports have helped to drive up the growth rate as India continues to be the fastest-growing economy amid the global slowdown. The IMF has forecast India to be the only economy that is expected to clock an over 6 per cent growth rate in 2025-26, as the US tariff turmoil is expected to disrupt world trade and slow down the growth of the global economy.
Pakistan's economy still facing massive turbulence
Pakistan's economy grew 2.4 per cent in the third quarter of the fiscal year that ends in June, the national accounts committee said on Tuesday, while revising up growth prospects for the current fiscal year. In a statement the committee approved a projection of 2.68 per cent provisional growth in GDP during FY 2024/25, taking the size of Pakistan's economy to $410.96 billion. This month Pakistan's central bank cut its key policy rate by 100 basis points to 11 per cent, citing an improved inflation outlook and resuming a series of cuts from a record high of 22 per cent, following a brief pause in March, to support growth.
The latest national accounts aggregates for fiscal 2024/25 showed the size of the economy at 114.7 trillion rupees ($410.96 billion) up from 105.1 trillion rupees ($ 371.66 billion), the committee said. Growth in the agriculture sector was 1.18 per cent in Q3, despite a decline in important crops, while industry contracted 1.14 per cent, hit by negative growth in mining and quarrying and large-scale manufacturing. The committee also approved Pakistan's revised GDP growth at 1.37 per cent in the first quarter and 1.53 per cent in the second.
Pakistan's manufacturing sector growth slowed to a seven-month low in April, with the HBL Pakistan Manufacturing Purchasing Managers' Index (PMI) easing to 51.9 from 52.7 in March, weighed by concerns over global trade.
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Pakistan dependence on loan
Pakistan is preparing to raise USD 4.9 billion in external commercial financing for the next fiscal year (FY2025- 26), Pakistani media reported citing sources familiar with the matter. As part of its financing plan, the government intends to secure USD 2.64 billion in short-term loans from commercial banks at expected interest rates of 7-8 per cent, without strict conditions or performance benchmarks, as per ARY News.
An additional USD 2.27 billion is also expected to come through long-term borrowing arrangements from commercial banks. Efforts are underway to tap four major international banks. This includes a proposal to obtain USD 1.1 billion from the Industrial and Commercial Bank of China (ICBC), along with USD 500 million each from Standard Chartered Bank and Dubai Islamic Bank.
A commercial guarantee is also being sought for a USD 500 million loan from the Asian Development Bank (ADB). Meanwhile, the International Monetary Fund (IMF) has set a target for Pakistan to boost its foreign exchange reserves to USD 13.9 billion by the end of June. The State Bank of Pakistan currently holds net reserves of approximately USD 14 billion, reportedly enough to cover three months of imports.
(With inputs from agencies)