India Business Journal - FY26 real GDP growth estimated at 7.4%, nominal GDP pegged at 8%

ECONOMY

FY26 real GDP growth estimated at 7.4%, nominal GDP pegged at 8%

IBJ Bureau
Jan 08, 2026

India’s economy is estimated to grow by 7.4 per cent in real terms in FY26, according to the first advance estimates released by the Ministry of Statistics and Programme Implementation (MoSPI). The growth projection marks an improvement over the 6.5 per cent expansion recorded in FY25.

In nominal terms, the Gross Domestic Product (GDP) is estimated to rise by 8 per cent in FY26. The first advance estimates of the GDP were keenly awaited, as the government takes this into account for policy decisions in the upcoming Union Budget 2026-27.

The real Gross Value Added (GVA) is projected to rise by 7.3 per cent in FY26, and services sector remains the key growth engine, according to MoSPI.

Private consumption is seen expanding by 7 per cent year on year (YoY) compared to a 7.2 per cent expansion in the last financial ‌year.

The Union Budget is scheduled to be presented on Sunday, February 1. The government assumes a certain level of nominal GDP growth for the next year, taking into account the first advance estimates of this financial year. This, in turn, determines how much fiscal deficit is feasible and how much tax growth can be expected.

State Bank of India’s research team had stated that GDP growth for FY26 would be around 7.5 per cent with an upward bias. “The second advance estimates, incorporating additional data and revisions, are scheduled to be released on February 27, 2026. So, all these numbers are expected to change with the base revision to 2022-23,” it had added.