NEW DELHI: As the government is set to announce the first quarter GDP growth numbers, analysts and economists believe the economy grew at 6.5-7% in the first three months of the 2025-26 despite many headwinds and geo-political turbulence, predict economists. Economists believe that rural demand and government capital expenditure will help keep the growth at over 6.5%. The Reserve Bank of India (RBI) had projected the growth to be 6.5% during the quarter.
State Bank of India (SBI) projected the growth to be at 7%, while ICRA projected 6.7%, IDFC First Bank estimated 6.9%, while Bank of Baroda estimated the growth to remain between 6.4-6.5%.
While the gross domestic product (GDP) for this quarter is likely to remain between 6.5-7%, the gross value added (GVA) will remain between 6.3- 6.5%. However, there could be some slowdown in industrial GVA. ICRA pegs the industrial GVA growth to decline to 4.0% in Q1 FY2026 from 6.5% in Q4 FY2025, with excess rainfall affecting mining and electricity sectors.
Gaura Sen Gupta, chief economist, IDFC First Bank, said: “From the expenditure side, growth is supported by rural demand and government capital expenditure. Meanwhile, urban demand has likely remained weak, reflecting muted urban wage growth.”
With the looming US tariff and ongoing geo-political turmoil, there were fears of Indian growth being affected in the coming quarters. However, economists suggest that the bilateral tariffs are unlikely to have a negative impact on exports, due to front-loading of exports to the US.
