Happy Friday night, folks!
While some are winding down with Netflix or nimbu-soda, we’re here with numbers that just can’t wait till Monday.
India’s economy just pulled off a showstopper, and before you crash for the weekend, here’s the story worth knowing.
📌 India beats estimates: GDP at a 5-quarter high
India’s GDP grew 7.8% in the April–June quarter of FY26, beating estimates and marking a five-quarter high. The numbers, released today by the National Statistics Office (NSO), outpaced both market expectations and the RBI’s forecast.
For context:
Economists expected growth around 6.3% - 7% (median 6.7%).
RBI’s estimate stood at 6.5%.
Last year’s Q1 growth was 6.7% - a 15-month low.
📌 The numbers that matter
Real GDP (constant prices): ₹47.89 lakh crore vs ₹44.42 lakh crore last year.
Growth rate: 7.8% (up from 6.7% YoY).
Nominal GDP (current prices): ₹86.05 lakh crore vs ₹79.08 lakh crore last year.
Growth rate: 8.8%.
In short: growth is broad-based, but the real kicker is public spending. The government’s 52% jump in capital expenditure has clearly lifted the economy.
📌 Sector-wise breakdown
Here’s how different parts of the economy fared:
Primary sector (Agri + Mining): 2.8% growth.
Agriculture: +3.7% (up from 1.5% last year).
Mining: –3.1% (a reversal from +6.6%).
Secondary sector (Manufacturing + Electricity): +7%.
Manufacturing: +7.7% (steady improvement).
Electricity/Construction: uplifted by public infra spending.
Tertiary sector (Services): +9.3% - the star performer.
Trade, hotels, transport, communication: +8.6% (up from 5.4%).
Finance, real estate, professional services: +9.5%.
Public admin & defence: +9.8%.
📌 So, what’s fueling the boom?
Public Expenditure: Government capex +52% (major driver).
Construction & Agriculture: Strong momentum, rural demand improving.
External Trade: Exports grew 5.9% in Q1, powered by U.S. demand.
Other Indicators: Higher GST collection, steel output, and cargo traffic signal broad activity.
As Sakshi Gupta (HDFC Bank) put it: “Construction and agriculture are two sectors where we’ve accounted for higher growth.”
📌 But it’s not all sunshine
Global risks loom large:
Tariffs: Trump’s 25% tariffs on Indian imports, now hiked to 50% with the Russian oil levy, could dent growth by ~30 bps (Barclays estimate).
Monsoon dependency: A favourable monsoon is baked into projections; any slippage could hit agri momentum.
Global trade weakness: India is relatively shielded, but not immune.
Still, domestic demand remains the anchor, and that’s India’s advantage.
📌 The outlook
RBI may turn to rate cuts in the coming quarters to support consumption.
GST rationalisation is on the table, which could give spending a boost.
IMF & World Bank peg India at 6.3%–6.4% growth in FY26, keeping us among the world’s fastest-growing economies.
In other words, even with tariffs and trade risks, India is positioned to stay in the global growth spotlight.
So, that’s it for today. If you enjoyed this edition, subscribe to hear from us every day!
See ya 👋
