India's Q3 FY26 GDP growth likely at 8.3% despite base effect: Report

A Union Bank of India report forecasts India's Q3 FY26 GDP growth at a robust 8.3%, a significant jump from 6.4% last year. The growth is attributed to GST rate cuts, though nominal GDP growth is expected to slow to 8.5%.

Union Bank Projects 8.3% GDP Growth for Q3 FY26

The country's Gross Domestic Product (GDP) growth for the third quarter of the current financial year (Q3 FY26) is likely to remain elevated at 8.3 per cent despite an adverse base effect, according to a report by Union Bank of India.

The report noted that Q3 FY26 GDP growth likely remained elevated at 8.3 per cent, propelled by growth following the GST rate cut, even as it faced an unfavourable base effect. It stated "GDP data for Q3 FY26, due on 27th February, likely clocked 8.3%, sharply higher from the same period previous year (Q3 FY25: 6.4 per cent)".

GVA and Nominal GDP Insights

The Gross Value Added (GVA) growth for Q3 FY26 is likely to have improved to 8.0 per cent from 6.5 per cent in Q3 FY25, though it may be marginally slower than 8.1 per cent recorded in Q2. More importantly, the report highlighted that nominal GDP growth likely slowed further to 8.5 per cent from 8.7 per cent in Q2 and 10.3 per cent in the same period last year. The moderation in nominal GDP growth is attributed to a fall in the GDP deflator amid declining inflation.

A Note on Base Year Revision

The bank, however, clarified that given the uncertainty with respect to the impact from the base year revision on GDP numbers, its estimates have been provided based on the old base year.

Future Outlook and Official Data Release

While the report mentioned that the growth outlook for FY26 remains broadly resilient and early indicators for FY27 suggest continued momentum, the report stated that annual estimates will need to be revisited once clarity emerges on the forthcoming GDP base revision by the Ministry of Statistics and Programme Implementation (MoSPI).

The government's Ministry of Statistics and Programme Implementation (MoSPI) is set to release the Gross Domestic Product (GDP) data with the revised base year of 2022-23 today. The upcoming release is expected to provide further clarity on growth trends and the impact of the base year revision on the overall economic assessment. (ANI)

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