Economists expect GDP growth in 7.4 pc-7.6 pc range in FY26

New Delhi, Nov 28 As the average gross domestic product (GDP) growth rate remained at 8 per cent for the first half of the current financial year H1 FY26, economists on Friday predicted that the nation's FY26 GDP growth would be in the range of 7.4 per cent to 7.6 per cent.

After the Ministry of Statistics data showed a resilient 8.2 per cent GDP growth for the second quarter (Q2 FY26), surpassing the estimates for the second consecutive time after a robust 7.8 per cent growth rate in first quarter, Aditi Gupta, an economist from Bank of Baroda, said that at 8 per cent in H1 FY26, India’s growth remains on a strong footing and the outlook for H2 remains promising.

"We expect GDP growth in the range of 7.4-7.6 per cent in FY26," she said.

Considering the early indicators, Gupta stated that the consumption demand received a significant boost from the GST rationalisation, which also coincided with the festive period.

The momentum is likely to be reflected in the third quarter as well.

"Auto sales showed significant traction in the festive period, with both passenger vehicle as well as two-wheeler sales registering record highs. Urban demand is also showing signs of recovery with an improvement in non-oil-non-gold imports," Gupta said.

Taking the recent GDP growth data into consideration, Crisil has raised its fiscal 2026 GDP forecast to 7 per cent from 6.5 per cent after the first half clocks 8 per cent.

India’s real GDP growth at 8.2 per cent in the second quarter exceeded expectations, but the nominal print was modest at 8.7 per cent.

The difference between real and nominal is the smallest since the third quarter of fiscal 2020.

"Private consumption was the main driver of higher real growth. From the supply side, manufacturing and services saw a significant rise," said Dharmakirti Joshi, Chief Economist, Crisil Ltd.

Joshi noted that the third quarter is expected to continue benefiting from some of these tailwinds.

While government investment will likely stabilise, there are hints of a belated uptick in private investments.

Moreover, the rationalisation of -- and reduction in -- the goods and services tax (GST) rates is bolstering private consumption, complementing reduced income tax and interest rate cuts (the latter induced by the repo rate cuts made by the Monetary Policy Committee of the Reserve Bank of India this year), the economist noted.

Meanwhile, Assocham believe that the robust real DGP growth print of 8.2 per cent for the second quarter is another affirmation of the nation’s strong economic resilience.

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Broad-based expansion across major sectors and improving domestic demand show how policy stability and reforms are translating into real growth.

Even in a challenging global environment, the government has ensured resilience and confidence, keeping India among the world’s fastest-growing major economies, Minda added.

PHDCCI President Rajeev Juneja said that the tertiary sector's rise was the main driver of this expansion, followed by the secondary sector.

Manoranjan Sharma, Chief Economist, Infomerics Valuation and Ratings Ltd, noted that India’s Q2GDP growth is defying its strongest pace in six quarters.

"The expansion was underpinned by a resilient rural economy, stepped-up government expenditure, and front-loaded export shipments. While private sector capital formation remained muted, the combined strength of rural demand and public spending delivered a powerful boost to overall activity," Sharma highlighted.

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