Strong show during hard times, wait for more

BEATING ALL THE forecasts, GDP growth for Q2 of FY26 is estimated at 8.2%. This suggests the strongest upturn in the post-Covid period and most importantly this growth appears to be broad-based with secondary and tertiary sectors growing at 8.1% and 9.2%, respectively.

- N R BHANUMURTHY

Primary sector is to grow at 3.1% although with better monsoons and increased area under cultivation the final print could be higher. Decline in food prices and revival in rural demand do suggest an upward revision in agriculture growth.

Forthe first half of FY26,the Indian economy seems to have grown at a very impressive rate of 8%, thus, suggesting that for the whole year, we should expect a growth of 8% with upward risks for this estimate are higher compared to downside risks.

What led to this increased optimism on GDP growth? Despite a mild moderation in the investment rate, from 35.2% to 34.8% between Q2 of FY25 and FY26, sharp rise in growth of manufacturing from 2.2% to 9.1% suggest an increased capacity utilisation.