India’s Q3 GDP Growth Likely at 8.3%, Driven by GST Rate Cut: Union Bank of India Report
India’s Gross Domestic Product (GDP) growth for the third quarter of the current financial year (Q3 FY26) is expected to remain strong at 8.3 per cent, despite facing an adverse base effect, according to a recent report by Union Bank of India. The report highlighted that the growth was largely propelled by consumption and investment following the recent GST rate cut.
GVA Growth Shows Robust Momentum
The report noted that the Gross Value Added (GVA) growth for Q3 FY26 is likely to have improved to 8.0 per cent, up from 6.5 per cent in Q3 FY25. However, this is slightly lower than the 8.1 per cent recorded in the second quarter, indicating a modest moderation in overall activity.
Nominal GDP Growth Moderates
While real GDP growth remains elevated, nominal GDP growth is expected to slow further to 8.5 per cent, down from 8.7 per cent in Q2 and 10.3 per cent in Q3 FY25. The report attributed this moderation to a fall in the GDP deflator, reflecting the impact of declining inflation on the overall price level.
Base Year Revision Adds Uncertainty
The bank clarified that its estimates are based on the old base year, as uncertainty remains regarding the impact of the upcoming GDP base year revision. India’s Ministry of Statistics and Programme Implementation (MoSPI) is set to release GDP data with the revised base year of 2022-23 today. The final annual estimates for FY26, and projections for FY27, will need to be revisited once the revised data is available.
Union Bank of India’s report concluded that, despite these adjustments, the growth outlook for FY26 remains broadly resilient, and early indicators for FY27 suggest continued economic momentum. The upcoming GDP release is expected to provide further clarity on growth trends and offer a more comprehensive assessment of India’s economic trajectory.
(This article has been syndicated from ANI)
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