New Delhi [India], August 29 (ANI): India’s GDP for the first quarter of financial year 2026 is expected to clock a growth rate of 7 per cent, up from 6.5 per cent in the first quarter of Financial year 2025 (Q1 FY25), according to a report by Union Bank of India (UBI).
The report added that Gross Value Added (GVA) growth for the quarter is estimated at 6.7 per cent, a marginal increase from 6.5 per cent in the same quarter last year, but slightly below the 6.8 per cent registered in Q4 FY25. The GVA is economic indicator that measures the value of goods and services produced within an economy or the industry.
UBI’s Q1 FY25 projections are slightly lower than the 7.4 per cent recorded in the previous quarter.
According to the report, the key highlight for the quarter is the narrowing gap between nominal and real GDP growth, with nominal growth expected to ease to the 8-8.5 per cent range, down from around 9 per cent earlier. The report added that this can be attributed to a sharp drop in the GDP deflator, driven by deflation in the WPI and easing CPI inflation.
The report added that the GDP growth in Q1 appears frontloaded, partly to pre-empt the potential impact of newly imposed 50 per cent US tariffs and due to favourable base effects. Also the first quarter of FY25 was marked by elections, which delayed government spending, creating a low base for comparison.
Sector-wise, agriculture and services are likely to be the main growth drivers. The report added that the Agri GVA is likely to have grown 6 per cent, up from 5.4 per cent in the previous quarter. Services GVA likely to expand by 7.8 per cent, led by public administration (10.2 per cent) and financial services (8.8 per cent).
However, the industry segment is likely to be slowed, with growth easing to 4.9 per cent from 6.5 per cent in Q4 FY25.
Within industry, the report anticipated that the manufacturing is estimated to have grown at 4.1 per cent, while construction likely to maintain strong momentum at 10.1 per cent. Mining and electricity are likely to contract by 2.5 per cent and 2.0 per cent, respectively.
The GDP-GVA wedge is estimated to have narrowed to 0.29 per cent from 0.62 per cent in Q4 FY25, likely due to frontloaded subsidies despite slower indirect tax collections.
Union Bank of India report continues to maintain India’s FY26 growth forecast at 6.3 per cent, but caution that growth may trail below 6 per cent in subsequent quarters due to potential downside risks from the US tariff impact and delayed investment recovery. (ANI)
Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News
HINDI, MARATHI, GUJARATI, TAMIL, TELUGU, BENGALI, KANNADA, ORIYA, PUNJABI, URDU, MALAYALAM
For more details and packages
