Finance ministry sees strong Q2 growth amid risks
The Finance Ministry estimated India’s Q2 FY27 real GDP growth at 7.35%, above the RBI’s 7.2% projection but below Q1’s 7.8%. It flagged crude prices, food inflation and kharif crop uncertainty as key risks.
pre-market3 sources ↓machine-written, see hownot a recommendation
- of FY27
- 7.35% in Q2
The Finance Ministry estimated India’s real GDP growth at 7.35% in Q2 of FY27, covering July to September 2026. The nowcast is 15 basis points above the Reserve Bank of India’s 7.2% projection, but marks a moderation from the 7.8% expansion recorded in Q1 FY27. The estimate was included in the ministry’s October monthly economic review released on 29 Oct 2026.
The projection indicates that domestic demand and business activity remained supportive during the quarter. The supporting indicators cited in the reports included industrial production, electricity consumption, port traffic, Goods and Services Tax collections and automobile sales. Stronger activity across these measures keeps the growth outlook favourable for consumption-linked sectors, manufacturers and lenders exposed to economic expansion 💼.
However, the ministry described the near-term outlook as subject to considerable uncertainties. Elevated crude oil prices can increase input, transport and import costs, while rising food inflation can reduce household purchasing power and complicate the inflation outlook. The uncertain performance of the kharif crop also remains important for rural demand, food prices and the broader consumption cycle 🌾.
The Department of Economic Affairs’ nowcasting model projected full-year FY27 real GDP growth at 7.3%. That is above the 7.2% upper band suggested in the Economic Survey earlier this year, although the Q2 and full-year figures remain estimates rather than official national accounts data. Nowcasting uses recently released economic indicators to assess the latest quarter before the formal GDP release.
For markets, the combination of above-consensus growth and visible inflation risks creates a mixed macro backdrop. Banking and automobile activity are key areas to track as demand data develops, while energy-sensitive industries remain exposed to crude prices. The next major markers are the official Q2 GDP release, subsequent inflation readings, kharif crop data and the RBI’s assessment of growth and price pressures.
Source: The New Indian Express, 29 Oct 2026
Not investment advice. For informational purposes only.