GDP – India’s Economy Seen Expanding 8.3% in Q3 FY26
GDP – India’s economy is projected to have maintained strong momentum in the third quarter of the current financial year, with growth estimated at 8.3 percent, according to a recent assessment by Union Bank of India. The anticipated expansion comes despite statistical challenges linked to an unfavourable base effect from the previous year.
Growth Holds Firm Despite Statistical Headwinds
The bank’s report suggests that Gross Domestic Product growth for Q3 FY26 likely accelerated significantly compared with the same period a year earlier. In Q3 FY25, the economy had grown by 6.4 percent. The sharper expansion this year is believed to have been supported in part by the impact of the GST rate cut, which is seen as having stimulated economic activity across sectors.
Official GDP figures for the quarter are scheduled to be released on February 27. Economists will be closely watching the data to confirm whether the estimated growth rate aligns with broader expectations of sustained economic resilience.
GVA Signals Broad-Based Improvement
Beyond headline GDP numbers, Gross Value Added is also expected to show improvement. Analysts estimate GVA growth for Q3 FY26 at around 8.0 percent, up from 6.5 percent in the same quarter last year. However, this would represent a slight moderation from the 8.1 percent recorded in the second quarter of the current financial year.
GVA is considered a key indicator because it measures the value of goods and services produced across various sectors, offering a clearer picture of underlying economic activity. The projected rise indicates that core sectors of the economy continued to perform steadily during the quarter.
Nominal GDP Growth Eases on Lower Inflation
While real GDP growth appears strong, nominal GDP growth is expected to show a softer trend. The report projects nominal growth at 8.5 percent for Q3 FY26, marginally lower than 8.7 percent in Q2 and significantly below the 10.3 percent recorded in the corresponding quarter last year.
This moderation is largely attributed to a decline in the GDP deflator, a measure linked to inflation. As price pressures eased, the gap between real and nominal growth narrowed. Lower inflation typically reduces the nominal value of output even when actual production volumes remain robust.
Base Year Revision Adds Uncertainty
The bank has clarified that its projections are based on the existing GDP base year, noting that upcoming changes could alter the broader picture. The Ministry of Statistics and Programme Implementation is set to release GDP data using a revised base year of 2022–23.
Revisions to the base year are a routine statistical exercise aimed at better reflecting the current structure of the economy. However, such updates can lead to adjustments in previously published growth rates, making year-on-year comparisons more complex in the short term.
Outlook for FY26 and Beyond
Despite uncertainties linked to statistical revisions, the overall growth outlook for FY26 remains stable, according to the report. Early signals for FY27 also indicate that economic momentum may continue, supported by domestic demand and policy measures.
However, economists caution that annual growth projections may need recalibration once the impact of the new base year is fully understood. The upcoming data release is therefore expected to provide important clarity not only for the third quarter but also for the broader assessment of India’s economic trajectory.
Market participants, policymakers, and investors will be examining the revised figures closely to gauge trends in economic performance, inflation dynamics, and sectoral contributions.
The forthcoming GDP announcement is likely to play a significant role in shaping expectations for policy decisions and investment planning in the months ahead.