Q2 GDP: Indian economy may outshine forecast amid global disruptions

As economists and industry wait for the Q2 GDP numbers to be released by the National Statistical Office on Friday, reports say that the economy may outshine the 7 per cent forecast for the July-September period despite US tariffs and overall weak global cues. 

In the April-June quarter (Q1 FY26), the GDP growth was a five-quarter high at 7.8 per cent, and experts expect another stellar performance by the Indian economy.

India’s macroeconomic outlook remains one of cautious optimism, underpinned by robust domestic demand and easing inflationary pressures.

Growth is being supported by strong investment activities, recovery in rural consumption, and buoyancy in services and manufacturing, according to a latest SBI report.

The GST 2.0 reforms are expected to boost private consumption and domestic demand.

“We track 50 leading indicators in consumption and demand, Agri, Industry, service and other indicators, which shows acceleration in Q2 FY26 growth (as compared to Q1 FY26). The percentage of indicators showing acceleration has increased to 83 per cent in Q2 from 70 per cent in Q1,” the SBI report mentioned.

Based on the estimated model, “we obtain a nowcast of real GDP growth of 7.5-8.0 per cent (GVA: 8.0 per cent) in Q2 FY26,” the report added.

However, risks persist from volatile global commodity markets and potential spillovers from trade disruptions.

Overall, India’s near-term outlook is strong, with macroeconomic stability providing space for sustained medium-term growth, said the report.

Meanwhile, CareEdge Economic Meter expanded by 3.2 per cent (on-year) in Q2 FY26, marginally lower than 3.3 per cent growth in Q1 FY26.

“According to our model, real GDP growth for Q2 FY26 is projected at 7.2 per cent. We expect real GDP and GVA growth for FY26 at 6.9 per cent YoY. Nominal GDP growth for FY26 projected at 7.7 per cent, given the sharp moderation in inflation,” said the report.

Rationalisation of income tax rates, GST rate cuts, healthy rural economic activity, easing inflationary pressures, and the RBI’s interest rate cut will support growth in FY26. However, heightened external economic uncertainties remain a key monitorable, it added.