Economy beats RBI’s first-quarter forecast as domestic activity remains resilient despite geopolitical uncertainty and volatile global energy markets
Key Highlights
- India’s economy expanded 7.8% in the April-June quarter of FY 2026-27.
- Growth accelerated from 6.9% recorded in the corresponding quarter of FY26.
- The economy, however, slowed from 8.6% growth in the preceding quarter.
- Q1 growth exceeded the Reserve Bank of India’s 7% forecast.
- RBI has projected 6.7% economic growth for the full FY27.
- Real GDP reached ₹81.36 lakh crore compared with ₹75.46 lakh crore a year earlier.
- Nominal GDP increased 10.3% to ₹88.27 lakh crore.
- The performance came despite geopolitical uncertainty and disruption to global energy markets linked to the Iran conflict.
- MoSPI said the Indian economy has sustained its growth momentum despite global headwinds.
New Delhi, August 31: India’s economy expanded by a stronger-than-expected 7.8% in the April-June quarter of FY 2026-27, maintaining robust growth despite geopolitical tensions, volatile energy markets and uncertainty surrounding the global economy.
The first-quarter expansion was higher than the 6.9% growth recorded during the corresponding period of FY26, according to government data released on Monday. Growth, however, moderated from 8.6% in the preceding quarter.
The latest reading also comfortably exceeded the Reserve Bank of India’s 7% forecast for the April-June quarter. The central bank currently expects the Indian economy to expand 6.7% during the full 2026-27 financial year.
Economy Holds Up Against Global Risks
The performance indicates that domestic economic activity remained resilient despite concerns that the Iran conflict and associated disruption in global energy markets could affect India’s growth momentum.
Higher energy prices can pose particular challenges for India due to its dependence on imported crude oil. The conflict had raised concerns over inflationary pressures, higher input costs and weaker global demand.
Despite these risks, the Ministry of Statistics and Programme Implementation said the Indian economy had sustained its growth momentum amid global headwinds.
The Q1 performance also keeps India among the fastest-growing major economies, while providing policymakers with some reassurance as they seek to maintain growth against an uncertain external backdrop.
Real GDP Reaches ₹81.36 Lakh Crore
Real GDP, measured at constant prices, was estimated at ₹81.36 lakh crore during the first quarter of FY27, compared with ₹75.46 lakh crore during the same period of FY26, representing growth of 7.8%.
Nominal GDP, which measures economic output at current prices, was estimated at ₹88.27 lakh crore, up from ₹80 lakh crore in the corresponding quarter last year. This translates into nominal growth of 10.3%.
The difference between nominal and real GDP reflects the impact of changes in prices alongside actual economic output.
Growth Outlook Remains in Focus
The stronger Q1 performance provides India with a solid start to FY27, but the external environment remains an important risk.
Future growth will depend on whether domestic consumption and investment can maintain momentum while businesses contend with geopolitical uncertainty, commodity-price volatility and potential weakness in international demand.
The RBI’s full-year projection of 6.7% suggests growth is expected to moderate from the first-quarter pace. The coming quarters will therefore be closely watched to determine whether India’s domestic economic strength can continue to offset pressures from an uncertain global environment.
