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Tag: India GDP

  • India’s GDP Growth Projected At 7 Per Cent In Q2 FY26: Report

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    New Delhi:

    India’s GDP expansion is expected to reach a robust 7 per cent in the second quarter of the current financial year (Q2 FY26) from 7.8 per cent in the April-June period (Q1 FY26), a report said on Monday.

    Further, the growth in the gross value added (GVA) is expected to record a narrower dip to 7.1 per cent from 7.6 per cent, respectively.

    “Lower expansion in the services sector– 7.4 per cent in Q2 FY26 from 9.3 per cent in the first quarter this fiscal, and agriculture– 3.5 per cent from 3.7 per cent, is likely to outweigh a pick-up in the performance of the industrial sector to a five-quarter high 7.8 per cent from 6.3 per cent,” ICRA said in its report.

    The report estimated net indirect taxes (in nominal terms) to contract on a year-on-year (YoY) basis in the quarter under review, after having risen by 9.5 per cent in Q1 FY26, aided by the decline in indirect taxes to -5.2 per cent from 11.3 per cent in Q1 FY2026, amid the shallower contraction in its subsidies to -4.6 per cent from -7.3 per cent.

    Accordingly, the gap between the GDP and the GVA growth is expected to revert to the negative territory at 10 bps in Q2 FY2026, after being positive (18 bps) in the previous quarter.

    “A lower YoY rise in Government spending is likely to weigh on the pace of the GDP and GVA growth in Q2 FY2026 compared to Q1 FY2026,” said Aditi Nayar, Chief Economist, Head-Research and Outreach, ICRA.

    “However, inventory stocking related to the early onset of the festive season, enhanced by the GST-rationalisation induced volume pickup, and upfronting of exports to the US ahead of the tariffs, are expected to boost the performance of the manufacturing sector, and help industry GVA growth outpace that of the services after a gap of four quarters,” she added.

    On an enlarged base, the growth rate of the gross capital expenditure moderated to 30.7 per cent in Q2 FY2026 (10.3 per cent in Q2 FY2025) from 52.0 per cent in Q1 FY2026 (-35.0 per cent in Q1 FY2025).

    Simultaneously, in absolute terms, the monthly average capex rose to Rs. 1,019 billion in Q2 from Rs. 917 billion in Q1, the report noted.

    On average, the monthly capex rose to Rs 544 billion in Q2 FY2026 from Rs 378 billion in Q1 FY2026, which is around half of the government’s level, the report noted.

    (Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)


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  • Deutsche Bank expects FY25 fiscal deficit target could be lowered to under 5 per cent of GDP

    Deutsche Bank expects FY25 fiscal deficit target could be lowered to under 5 per cent of GDP

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    A faster-than-anticipated pace of fiscal consolidation could pave the way for a sooner-rather-than-later sovereign rating upgrade for India, according toKaushik Das, Chief Economist – India and South Asia, Deutsche Bank. 

    “The Central government’s target to bring the fiscal deficit down to 5.1 per cent of GDP in FY25 and further to 4.5 per cent of GDP in FY26 looks more credible now as the FY24 fiscal deficit has finally come in at 5.6 per cent of GDP vs the revised estimate of 5.8 per cent of GDP. Indeed, the FY25 fiscal deficit target could be lowered to under 5 per cent of GDP, in our view, thanks to a larger-than-expected dividend transfer by the RBI to the Government of India,” Das said in a note.

    For FY25, Deutsche Bank is forecasting real GDP growth of 6.9 per cent year on year vs 8.2 per cent in FY24, with momentum likely to moderate further to 6.5 per cent in FY26. “We are forecasting real GVA growth to moderate to 6.3 per cent in FY25 (from 7.2 per cent in FY24) and further to 6.2 per cent in FY26. With GDP growth of 8.2 per cent in FY24E, the base will become more challenging for this year’s growth, and hence we keep our growth estimate slightly below 7 per cent at this stage (the RBI’s growth projection is 7 per cent for FY25).

    The data revisions of the past year, the GDP deflator issue and the large discrepancies in the GDP component make analysis of the trend growth rate difficult. Consequently, we rely more on the GVA growth trend as well as the momentum of high-frequency growth indicators to inform our view on India’s growth outlook,” Das said.

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