ECONOMY
Robust consumption, government expenditure spur real GDP growth by 7.7% in FY26
- IBJ Bureau
- Jun 06, 2026
The country’s Gross Domestic Product (GDP) expanded by 7.8 per cent in real terms (deducting inflation numbers) in the January-March quarter or the fourth quarter (Q4) of FY26, according to the second advance estimates released by the Ministry of Statistics and Programme Implementation on Friday.
The growth numbers exceeded forecasts on strong domestic demand and government expenditure, before rising oil prices and supply-chain disruptions began clouding the outlook.
The Q4 FY26 GDP growth of 7.8 per cent was better than 7 per cent expansion a year ago (Q4 FY25) and 8 per cent in the previous quarter (Q3 FY26).
The full-year growth for FY26 accelerated to 7.7 per cent from 7.1 per cent in FY25, supported by healthy consumption and robust investment activity.
The gross value added (GVA) growth was 7.9 per cent during FY26, the same as the GVA growth recorded in Q4 FY26.
Nominal GDP (including inflation figures) in FY26 grew by 8.9 per cent in FY26, down from 9.7 per cent in FY25.
On the expenditure side, growth in Private Final Consumption Expenditure (PFCE) came in at 7.7 per cent in FY26, up from 5.8 per cent in FY25.
Gross Fixed Capital Formation (GFCF) also expanded to 8.2 per cent in FY26 from 6.2 per cent in FY25.
On the GVA side – manufacturing sector grew by 10.7 per cent in FY26 from 9.3 in FY25.
The agriculture sector growth eased to 3 per cent in FY26 from 4.2 per cent in FY25.
Services sector growth in FY26 stood at 9.3 per cent in FY26, up from 7.9 per cent in FY25.
Spike in oil prices and disruption in supplies from the Middle East – a key source for India’s crude oil, natural gas and LPG – will be fully visible in the current April-June (Q1) quarter of FY27.
The RBI has already cut its FY27 GDP growth forecast to 6.6 per cent from 6.9 per cent, citing elevated energy and commodity prices and persistent supply-chain disruptions linked to the conflict in West Asia.
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