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Why Economists Are Urging Caution Despite Strong GDP Growth in First Qtr
The New Indian Express Chennai
|September 01, 2025
DESPITE India's economy growing stronger-than-expected at 7.8% in the first quarter of FY26, economists caution that the growth print looks brighter than the underlying reality—thanks largely to a sharp drop in the GDP deflator from 3.4% in the previous quarter to 1% in Q1 of FY26, the lowest in 6 years.
The GDP deflator, which adjusts nominal GDP for inflation, fell sharply as both wholesale price index (WPI) and consumer price index (CPI) inflation moderated in April-June. This pushed real GDP growth higher, even as nominal GDP growth slowed to 8.8% from 10.8% in the previous quarter.
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