GDP Forecast
India's GDP likely grew 7.2% in Q2, nominal GDP below 8%, says India Ratings
This story was originally published at 14:26 IST on 12 November 2025
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NEW DELHI - India's GDP likely grew 7.2% in the September quarter, according to India Ratings and Research Pvt. Ltd. Meanwhile, nominal GDP growth slipped below 8% in Jul-Sept due to a low deflator on account of flat wholesale price inflation and benign retail inflation, the agency said.
The economy has navigated the treacherous waters better than expected due to strong domestic demand, India Ratings and Research said in its release. Retail inflation has declined faster than both the agency's and the Reserve Bank of India's expectations, boosting real wages and consumption demand, the rating agency added.
"From the demand side, private consumption is a leading growth driver due to steady real income growth both in upper-and lower-income households," India Ratings and Research Economist and Associate Director Paras Jarsai said in the release. "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 Jul-Sept", Jarsai said.
The statistics ministry will release the data on GDP growth for the September quarter on Nov. 28. India's real GDP growth was 7.8% and nominal GDP growth was 8.8% in the June quarter, according to the statistics ministry.
The GDP deflator was 0.2% in Jul-Sept due to flat WPI and low CPI, according to India Ratings and Research. As such, the nominal GDP growth is likely to have slipped below 8% in Jul-Sept, the agency said in the release. "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," the release said. "Nevertheless, continued weakening nominal GDP growth would be of greater concern as it may complicate the fiscal arithmetic." The government has assumed a nominal GDP growth of 10.1% for 2025-26 (Apr-Mar).
The spillover effect of low nominal GDP growth is also being reflected in slowing taxes of the government, India Ratings and Research said. Slowing net tax collection growth is likely to have caused GDP growth to be lower than the gross value added growth in Jul-Sept. "The GVA growth is expected to have firmed up to a seven-quarter high of 7.7% in 2QFY26, supported by a favourable base effect," the agency said.
India's GDP had grown 5.6% in Jul-Sept 2024 with a GVA growth of 5.8%. End
Reported by Krity Ambey
Edited by Vandana Hingorani
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