GDP in FY26 To Grow By 6.2 pc: Care Ratings
While overall consumption growth is likely to remain healthy, supported by rural demand, the mixed outlook of urban demand needs monitoring. Rural demand will be supported by good agricultural output and falling inflation and urban demand presented a mixed outlook
Chennai: The country is estimated to have clocked a GDP growth of 6.3 per cent in FY25, finds Care Ratings. Amidst an improvement in domestic economic activity, global uncertainties may pull down FY26 GDP growth to 6.2 per cent.
While overall consumption growth is likely to remain healthy, supported by rural demand, the mixed outlook of urban demand needs monitoring. Rural demand will be supported by good agricultural output and falling inflation and urban demand presented a mixed outlook.
Growth in gross domestic GST collections improved marginally to 9.7 per cent in Q4 FY25 from 9.5 per cent in Q3. Growth in consumer durables dipped sequentially and consumer non-durables contracted more in Q4. Passenger vehicle and two-wheeler sales in Q4 were lower than Q3.
However, strong central capex disbursement towards the end of Q3 also should have supported investment growth in Q4.
The 6.8 per cent growth in Q4 brings FY25 growth to 6.3 per cent, lower than the second advance estimate of 6.5 per cent.
Going forward, factors such as recovering rural demand, a lower tax burden, policy rate cuts, falling inflation, and expectations of a good monsoon should support an improvement in economic activity. A sustained recovery in consumption will be critical to drive a meaningful uptick in corporate capex. However, global uncertainties pose a headwind. Care Ratings expects FY26 GDP growth at 6.2 per cent.
