Ind-Ra pegs India’s Q2 GDP growth at 7.2%, led by private consumption

The National Statistics Office (NSO) is slated to release the official data on FY26 Q2 GDP growth estimates on November 28
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India Ratings & Research (Ind-Ra) on Wednesday projected India’s GDP to grow at 7.2 per cent in the second quarter of the current fiscal, with private consumption being the leading growth driver.

The Indian economy had expanded 5.6 per cent in the Q2 (July-September) of 2024-25 fiscal.

India’s real Gross Domestic Product (GDP) is estimated to have grown at the fastest pace in five quarters at 7.8 per cent in the April to June period of the current fiscal.

The National Statistics Office (NSO) is slated to release the official data on FY26 Q2 GDP growth estimates on November 28.

In a statement, Ind-Ra said it expects GDP growth to remain robust at 7.2 per cent year-on-year in the second quarter of FY26.

“From the demand side, private consumption is a leading growth driver due to steady real income growth both in upper- and lower-income households.

“The resilient services sector along with the favourable base-led goods exports growth in the manufacturing sector propelled GDP growth from the supply side during Q2 FY26″, Ind-Ra Economist & Associate Director Paras Jasrai said.

The economy has navigated the treacherous waters better than expected due to strong domestic demand. Retail inflation has declined faster than both the agency and the Reserve Bank of India’s expectations, boosting real wages and consumption demand, Ind-Ra report said.

It said the nominal GDP growth is likely to have slipped below 8 per cent y-o-y during Q2 FY26, the spill-over effect of which is getting reflected in slowing taxes of the government.

“The real GDP growth looks stronger as lower input costs have provided some succour to the growth momentum, despite heightened global economic uncertainty and volatility. Nevertheless, continued weakening nominal GDP growth would be of greater concern as it may complicate the fiscal arithmetic,” Ind-Ra added.

Ind-Ra expects private consumption to have grown 8 per cent y-o-y in the second quarter of FY26, as against 7 per cent in Q1 and 6.4 per cent in Q2 FY25.

A favourable base effect, record low inflation, along with steady real rural wage growth, would lift the consumption demand growth to a three-quarter high, it said.

“The consumption demand was also supported by the income tax cuts as announced in the FY26 budget. The private consumption would have grown at an even higher pace, had there been no deferral of buying decisions due to the GST rate rationalisation,” Ind-Ra said.

Ind-Ra believes that the investment demand has grown at a healthy pace of 7.5 per cent y-o-y during Q2 FY26. Steady government capex remains instrumental in lifting investment demand at a time of uncertainty, it added.

Published on November 12, 2025