QuantEco Research | FY26 GDP - In line with headline expectations
Download ReportQuantEco Research | FY26 GDP - In line with headline expectations
In line with our expectations, the NSO (National Statistics Office) projects India’s FY26 GDP growth to accelerate to 7.4% from 6.5% recorded in FY25. Despite the expectation of a sturdy real activity, the Nominal GDP growth is projected to slip to 8.0% in FY26, the lowest in the post-COVID phase, on the back of a five-decade low deflator. At a granular level, the estimated acceleration in real activity is primarily on account of investments and government consumption on the demand side, and manufacturing industries and services on the supply side. Notably, exports are expected to depict resilience despite an adverse global backdrop, while private consumption is slated to post a mild moderation despite the alignment of supportive factors in recent months. Basis the available GDP growth figure of 8.0% for H1 FY26 and the NSO’s FAE for the full year, the GDP growth derived for H2 FY26 stands at 6.9%, thereby indicating the possibility of a sharp deceleration in the second half of the financial year. On a net basis, the NSO’s FAE validates our view of a surge in FY26 growth momentum on the back of a favourable statistical impact, front-loading of economic activity (esp. on exports and public spending) and fiscal and monetary policy support - this is believed to mitigate downside risk from the adverse geoeconomic and geopolitical environment. As such, we maintain our FY26 GDP growth projection of 7.4%.