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India’s GDP growth to moderate to 7% in Q2FY26: ICRA
Nov-19-2025

Rating agency ICRA has projected India’s Gross domestic product (GDP) growth to moderate to 7 per cent in July-September period of FY26 (Q2FY26), from 7.8 per cent in the previous quarter, amid lower government spending. Indian economy had expanded 5.6 per cent in the Q2 (July-September) of 2024-25 fiscal.

ICRA said while the services and agriculture sectors would lose some momentum in the second quarter, industrial performance would be strong propelled by manufacturing, construction and favourable base effects. This is expected to underpin the quarter's economic activity.

ICRA chief economist Aditi Nayar said a lower YoY rise in government spending is likely to weigh on the pace of the GDP and GVA growth in Q2 FY2026 compared to Q1 FY2026. However, she said 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, and help industry GVA growth outpace that of the services after a gap of four quarters. 


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