India’s GDP growth expected to further advance in Q4 FY26: Economist

India’s growth is expected to advance in Q4 FY26 further as has been evident form the high frequency indicators, according to economists, as India’s GDP growth has been revised upwards to 7.6% form the previous estimate of 7.4% for FY26, based on the old series.
Overall, “we foresee the limited impact of the change in the new series, with no durable bearing on fiscal ratio. With this, we continue with our forecast of 7-7.5% growth for FY27,” said Jahnavi Prabhakar, economist, Bank of Baroda.
The real GDP growth for FY26 looks achievable at 7.6% and “is in line with our expectation,” Prabhakar added.
This will be on the back of remarkable double-digit growth expected in the manufacturing sector (11.5% from 9.3%) which has expanded in the last three years.
Additionally, stupendous growth is expected in the trade, hospitality and tourism sector with 10.1% growth in FY26 from 6.6% in the previous year, said the report.
In nominal terms, strong growth in exports (9.6% from 8.3%) along with steady growth in PFCE at 8.9% will hold ground for solid growth in FY26.
There has been reasonable traction in consumption demand amid the recent rationalisation of GST rates. A recovery in urban consumption bodes well for the growth outlook.
“Notably, some uncertainty pertains on the tariff front, especially in the US, given the recent changes. However, the new trade deals with other countries might offset any such negative impact,” said the report.
GVA registered a growth of 7.8% in Q3 FY26, up from Q3 FY25 (7.4%) as per the new series. Among the sectors, major momentum was delivered by both services and manufacturing. Within services, growth was broad based, with trade, hotels noting a growth of 11% in Q3 FY26 versus 6.7% in Q3 FY25.