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India’s GDP Expected to Grow 7.2% in Q2 FY2025-26, Driven by Strong Consumption
Report: The Indian economy is expected to register a robust 7.2% growth in the second quarter of the current financial year 2025-26. An 8% increase in private consumption will be the primary driver. Income tax relief and stable incomes have boosted consumption. GDP grew by 7.8% in April-June. According to rating agency India Ratings, GST and income tax reforms have boosted economic activity.
The Indian economy is likely to record a strong 7.2 percent growth in the second quarter of the current financial year 2025-26, which follows the April-June period, propelled by strong private consumption growth. Real GDP growth of 7.8 percent in April-June was the fastest in five quarters, while it grew at a 5.6 percent pace in the second quarter of 2024-25.
The NSO will publish GDP growth for the second quarter, July-September, of the current financial year on November 28. Rating agency India Ratings and Research said in its report on Wednesday that private consumption would increase 8 percent year-on-year in the second quarter of FY 2025-26. It had grown by 7 percent in the first quarter of FY 2024-25 and 6.4 percent in the second quarter.
Paras Jasrai, economist and executive director at the rating agency, said that a surge in private consumption due to stable real income growth for both high- and low-income households is a key driver of growth. Income tax cuts also boosted consumption demand. If purchasing decisions had not been postponed due to the rationalization of GST rates, private consumption would have grown even faster.
