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Informist, Friday, Jun. 5, 2026

MUMBAI – Radhika Rao, senior economist and executive director, DBS Bank, said the following on India's GDP growth of 7.8% for the March quarter:  

Growth wrapped up financial year 2025-26 (Apr-Mar)on a strong note. High frequency data for rural and urban demand had pointed to relative resilience in the quarter. While the US-Iran conflict broke out towards the end of March quarter, output in the quarter was relatively insulated from bulk of adverse impact, with corporates tackling a build-up in cost pressures by tapping into inventories. Certain pockets of manufacturing activity, however, were impacted, including fertiliser, cement, etc. 

Markets are likely to move on from the backward looking data and focus on potential spillover risks into 2026-27, particularly given the prospect of a prolonged disruption in the supply of critical inputs to downstream industries, higher energy as well as food costs impacting purchasing power and tighter financial conditions. Policymakers also acknowledged downside risks to their baseline growth outlook stemming from uncertainty over the duration and intensity of the conflict. Nevertheless, they are likely to raise interest rates if the inflation outlook evolves in line with the projections presented in their quarterly forecast.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Compiled by Shumaila Firoz 

Filed by Avishek Dutta

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