Budget may peg nominal GDP growth for 2025-26 at 10.4%

NSO has projected real GDP growth to ease to 6.4% in FY25

- PRIYANSH VERMA

The upcoming Union Budget is likely to project India's nominal GDP growth for the next financial year at 10.4%, higher than the 9.7% projected for FY25, according to an FE poll of 16 economists.

A 10.4% nominal GDP growth is sufficient for the government to peg the FY26 fiscal deficit target, as a percentage of GDP, below 4.5%, they reckon.

Most economists say the nominal GDP growth in FY26 is seen picking up mainly due to a rise in inflation, rather than real GDP expansion.

"Higher WPI inflation next year will predominantly lift the nominal growth," said Vivek Kumar, economist, QuantEco Research.

Kumar expects WPI inflation to rise to 3.5% in FY26 from 2.5% this year. In the first nine months of FY25, WPI inflation has averaged 2.2%.