Informist Poll
India's Q2 GDP growth likely eased to 3-quarter low of 7.2%
This story was originally published at 09:16 IST on 25 November 2025
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By Shubham Rana
NEW DELHI - India's GDP growth in the September quarter is likely to have fallen to a three-quarter low of 7.2?cause of a slower pace of government spending and moderation in services sector activity, according to a poll of 21 economists by Informist.
At 7.2%, GDP growth in the September quarter would still be higher than the Reserve Bank of India's forecast of 7.0%. The Indian economy grew 7.8% in the first quarter of FY26 and 5.6% in the September quarter last year. The statistics ministry will release GDP data for the September quarter at 1600 IST on Friday.
Gross value added growth, which some economists consider a more reliable indicator of economic activity than GDP, is seen easing to 7.3% in the September quarter from a six-quarter high of 7.6% in Apr-Jun. GVA grew 5.8% in Jul-Sept last year.
Growth is likely to be supported by the statistical effect of lower inflation, a key reason behind the higher-than-expected real GDP growth of 7.8% in the June quarter, when nominal GDP growth fell to a three-quarter low of 8.8%. "A favourable base likely played its part, and we expect quirks due to deflator-related issues (low WPI inflation inflating real growth estimates in the services sector) to continue obstructing a clear reading of growth momentum," ANZ Bank said in a report.
The difference between nominal GDP growth and real GDP growth was 100 basis points in the June quarter, the lowest since the September quarter of FY20 and significantly lower than the historical average of 470 bps. This difference between nominal and real GDP growth could be even lower in the September quarter as both CPI inflation and WPI inflation fell more from Apr-Jun.
"A lower YoY (year-on-year) rise in government spending is likely to weigh on the pace of the GDP and GVA (gross value added) growth in Q2 FY2026 compared to Q1 FY2026," Aditi Nayar, chief economist at rating agency ICRA, said in a report. Government capital spending slowed down in Jul-Sept, rising 31% on year compared with a 52% rise in the June quarter.
"However, inventory stocking related to the early onset of the festive season, enhanced by the GST-rationalisation induced volume pick-up, and upfronting of exports to the US ahead of the tariffs, are expected to boost the performance of the manufacturing sector," Nayar said.
The US' 50% tariff on imports from India came into effect late August, which is likely to have weighed on growth even as exports grew due to front-loading of shipments. "Despite the drag from punitive US tariffs, monthly data suggest export growth picked up last quarter, driven by an improvement in both services and goods exports," Shivaan Tandon, Asia economist at Capital Economics, said in a note.
"Nevertheless, the boost from the external sector is likely to have been more than offset by a slowdown in domestic demand growth. While high-frequency indicators suggest that private consumption remained firm, momentum elsewhere appears to have softened," Tandon said.
Among the three main sectors of the economy, growth is expected to have slowed down in the services and agriculture sectors in the September quarter. ICRA projects growth in the services sector to fall to 7.4% in Jul-Sept from 9.3% in the June quarter and agriculture growth to ease to 3.5% from 3.7%. Industrial sector growth is seen rising to a five-quarter high of 7.8% in the September quarter, according to ICRA.
Another key event that took place in the September quarter was the changes to the goods and services tax regime with tax rates lowered for hundreds of goods from food items to electronics and small cars. Since GST cuts came into effect from Sept. 22, the full impact of the tax relief is expected to be seen in the December quarter GDP data, economists said.
The following table details the GDP growth estimates of economists (in ascending order):
| ORGANISATION | Jul-Sept GDP growth |
| Moody's Analytics | 6.8% |
| ANZ Bank | 7.0% |
| Nirmal Bang Equities Pvt. Ltd. | 7.0% |
| ICRA | 7.0% |
| STCI Primary Dealer | 7.0% |
| Sunidhi Securities | 7.0% |
| QuantEco Research | 7.1% |
| HDFC Bank | 7.2% |
| India Ratings and Research | 7.2% |
| CareEdge Ratings | 7.2% |
| Capital Economics | 7.2% |
| YES Bank | 7.3% |
| IDFC FIRST Bank | 7.3% |
| Barclays | 7.4% |
| ICICI Securities Primary Dealership | 7.4% |
| ICICI Bank | 7.5% |
| Kotak Mahindra Bank | 7.5% |
| DBS Bank | 7.5% |
| Nomura | 7.6% |
| Deutsche Bank | 7.7% |
| State Bank of India | 7.5-8.0% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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