India is a large and populous country with a lot of progress. These are the reasons why we are receiving data from the fourth quarter of 2025 only now, i.e. after two readings in most developed countries of the world. But for what data it is.
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GDP increased by 7.8 percent. year to year in the fourth quarter of last year (October-December), i.e. slower than in the third quarter (+8.4%). But this is still much better than forecasted by economists, who estimated +7.2%. Throughout 2025, the increase amounted to approximately 7.6%.
India's GDP
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On the other hand, the Japanese economy performed worse than expected. What is important is that, according to the IMF, Japan was to be only slightly ahead of India in GDP value for 2025. Japan According to the IMF forecast, it was to grow by 1.1%. up to USD 4.28 trillion, and grew by only 0.1 percent. rdr. India was expected to grow by 6.6%. to USD 4.13 trillion, and grew by 7.6%.
The difference was supposed to be 3.6 percent, and the forecasts were wrong by a total of 2 percentage points. to the detriment of India (by -1 percentage point for India and +1 percentage point for Japan). It seems that in another quarter or two, the countries will change places in the world ranking. Unless they have already changed, calculations of the nominal value of GDP for both countries have not yet been provided.
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Then it will be possible to officially announce: India is the fourth largest economy in the world and Japan is the fifth. India will then have the task of leapfrogging Germany, whose GDP grew by only 0.2%. YoY amounted last year to approximately USD 5.05 trillion. At this rate of development, it may take India just three years.
Consumption in India is growing
India is currently the world's fastest-growing economy despite slowing growth in government spending and investment. Consumption is growing rapidly and this was the main driver of development last year.
“India's GDP data for the third quarter of fiscal 2026 (and the fourth quarter of the calendar year) and the second preliminary estimate for fiscal year 2026 exceeded 7.5%, slightly exceeding our expectations. Importantly, the main GDP trends in the new data series are not materially different from those in the old series, suggesting continuity in the growth narrative rather than statistical distortion,” Sujan Hajra, chief economist and executive director at Anand Rathi Group, told Reuters Mumbai.
“These better-than-expected data have clear market implications. In the case of stocks, a better growth impulse strengthens corporate earnings prospects, especially in cyclical and domestic demand-oriented sectors. In the case of the debt market, stronger real growth – even with moderate nominal expansion – improves the prospects for public finances, supporting tax collections and reducing the risk of fiscal slippage,” he said.
Alexandra Hermann, chief economist at Oxford Economics from the UK, pointed out that strong demand driving up core inflation increases the risk of a rate increase before the end of 2026. This may slow down further growth and the fight for higher places in the global hierarchy.
