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India's Economy Surges: 7.5% GDP Growth Expected
18 Nov
Summary
- India's GDP projected at 7.5% for Q2 FY26, driven by rural demand.
- GST rationalisation and festive spending are key growth drivers.
- Manufacturing sector expected to outperform services after four quarters.
India's economy is poised for significant growth, with an estimated 7.5% GDP expansion in the second quarter of FY26. This projection is primarily driven by a surge in rural consumption and strategic investments, bolstered by the beneficial impact of GST rationalisation and anticipated festive season spending.
While one analysis anticipates a 7% GDP print, the 7.5% forecast highlights positive momentum. Factors such as early inventory stocking for festivals and an uptick in exports are expected to strengthen the manufacturing sector, potentially enabling it to surpass services growth for the first time in four quarters.
Leading indicators suggest a strong demand environment, with consumption and demand indicators rising to 83%. Although agriculture might see a slight slowdown, the industrial sector, encompassing manufacturing and construction, is expected to perform strongly, underpinning the overall economic activity for the quarter.
