High-frequency indicators point to moderation in Q3 GDP growth

Following higher than expected gross domestic product (GDP) growth of 8.2 per cent in the second quarter (July-September) of FY26, the Indian economy is expected to see some moderation in the third quarter (October-December) due to an unfavourable base effect and a slowdown in several key growth indicators.

- RUCHIKA CHITRAVANSHI

Economists expect Q3 GDP growth to remain above 7 per cent, supported by a pickup in consumption and investment.

The second advance estimates of GDP, along with the Q3 growth numbers, will be released on Friday, using a revised base year of 2022-23.

High-frequency indicators, such as electricity demand and steel consumption, showed sequential moderation in the third quarter, at -0.2 per cent and 4.6 per cent, respectively. Cement production, however, rose 11.1 per cent in Q3 of FY26 compared with 7.3 per cent in Q2. India’s merchandise exports and the Manufacturing Purchasing Managers’ Index (PMI) for both manufacturing and services also eased sequentially in Q3. However, proxy indicators, such as two-wheeler and domestic passenger vehicle sales, recorded growth of 20.9 per cent each in Q3 against 7.5 per cent and -1.53 per cent, respectively, in July-September FY26.