India's GDP Q1 data is set top be released today, it would be a fulcrum for the economic strategists and other people to plan their agendas accordingly hereon.
National Statistics Office (NSO) will be releasing India’s GDP data for the first quarter Q1 the financial year 2025-26, with forecasts that expect robust growth, aided by government spending and resilient demand, though tempered by concerns over private investment and global tariffs.
Major financial institutions and analysts believe that the Indian Q1 GDP growth will land at 6.5% to 7.0%, with a speculated estimate of around 6.8%. The State Bank of India also forecasts 6.8%-7% growth in line with other top estimates from ICRA (6.7%), HDFC Bank (6.6%), and Barclays (6.5%). The Reserve Bank of India's own official forecast for the quarter is 6.5%, a fraction below these consensus figures. The fast growth this quarter is likely to be the highest of the current fiscal year, with the growth expected to decline in later quarters due to tapering capital spending and impact of trade tariffs.
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The support to Q1's performance lies in a 52% increase in government capital spending year-over-year, which has driven infrastructure projects as well as the creation of employment. Domestic consumer spending, particularly rural, has contributed to growth as well as an uptick in collections by the government on revenues suggesting better tax compliance and activity. Exports were a prop to growth, though there are concerns regarding the state of global trade and imposition of tariffs on Indian products again.
Gross Value Added (GVA) during the quarter is anticipated to be modestly lower at around 6.4-6.5%, capturing the effect of moderating farm growth, solid manufacturing, and the significance of indirect tax collections on headline GDP figures.
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Corporate profits in Q1 indicated moderate momentum, with listed companies recording 4.7% revenue growth and 6.7% EBITDA growth over the previous quarter. Consumer spending is robust, but private capex is weak, bringing into question the long-term sustainability of high growth rates absent stronger investment from the business sector. Economists note tariffs and slowing export growth can increasingly impact both GDP and tax receipts in coming quarters.
India's real GDP growth is likely to surpass nominal growth in this quarter with lower inflation, providing a boost to the headline figure that is additional statistically. Still, weaker nominal GDP might dampen corporate profits and government tax revenues relative to budget targets, leading policymakers to seek means to spur private investment and offset any blow from external headwinds.
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In short, today's GDP release will confirm India's status as among the world's fastest-expanding major economies, but maintaining the pace after Q1 will call for risk monitoring pertaining to capex, exports, and external shocks.
