Key Highlights
- India’s Q4 FY26 GDP growth estimated at 7.3%.
- Growth higher than 7.1% recorded in Q4 FY25.
- Services sector growth projected at 9.1%.
- Utilities sector expected to benefit from increased power demand.
- Strong bank credit growth supports economic activity.
- Construction sector likely to remain resilient.
- Agriculture growth may slow to 2.1%.
- Mining growth expected to moderate to 1.7%.
- Manufacturing growth projected at 9.3%.
- FY27 GDP growth forecast at 6.5–6.8%.
New Delhi: India’s economy is expected to grow by 7.3% in the fourth quarter of FY26, slightly higher than the 7.1% growth recorded in Q4 FY25, according to a research report by Bank of Baroda. The improvement is largely attributed to stronger performance in the services and utilities sectors, despite moderation in agriculture, mining, manufacturing, and construction.
The report comes ahead of the Ministry of Statistics and Programme Implementation (MoSPI) releasing the provisional GDP estimates for Q4 FY26 and revised annual growth figures later this week.
According to the report, services sector growth is projected to accelerate to 9.1% in Q4 FY26, compared to 6.8% in the same quarter last year, supported by stronger banking activity, credit expansion, and higher financial sector momentum. Average bank credit growth stood at 14.3% during January-March 2026, significantly higher than 11.2% recorded a year earlier.
The utilities sector is also expected to witness improved growth, supported by increased electricity demand amid the onset of heatwave conditions during March 2026. Construction activity remained resilient, backed by strong infrastructure spending and healthy corporate earnings from infrastructure companies.
However, some sectors are likely to face downward revisions due to the impact of the West Asia crisis, rising fuel costs, and supply disruptions. Agriculture growth is expected to moderate to 2.1%, while mining growth may slow to 1.7%. Manufacturing growth is also projected to ease from 11.8% to 9.3%.
Looking ahead, Bank of Baroda expects India’s GDP growth in FY27 to moderate to 6.5–6.8%, as the full impact of higher energy prices, geopolitical tensions, monsoon uncertainties, and heatwave-related disruptions begins to affect economic activity.
Highlights
✔ GDP growth expected at 7.3% in Q4 FY26
✔ Services sector likely to grow 9.1%
✔ Utilities and construction support economic expansion
✔ Agriculture, mining and manufacturing may slow
✔ FY27 growth projected at 6.5–6.8% amid global uncertainties
