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India is scheduled to announce its Q1FY27 GDP in a few hours from now (August 31). Most economists see the economy projecting resilient trends and expect India’s real GDP growth to accelerate to around 7% in the first quarter of FY27.
“We estimate Q1FY27 real GDP growth at 7% with an upside of 0.2%,” Bank of Baroda said. The economist expects manufacturing, construction and services activity to remain supportive despite global uncertainties. The Bank of Baroda estimate is similar to the Reserve Bank of India estimate.
The estimate is higher than the 6.8% growth recorded in Q1FY26. Bank of Baroda also sees an upside of 0.2 percentage point to its Q1FY27 estimate if manufacturing activity performs better than expected.
Manufacturing, services to drive Q1FY27 growth
According to Bank of Baroda manufacturing, construction and services activity remained supportive despite global uncertainties. India’s Index of Industrial Production grew 7.3% year-on-year in June, while manufacturing output increased 7.8%. The services sector is expected to grow around 8% in Q1FY27, according to Bank of Baroda.
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Financial, real estate and professional services are expected to be among the strongest performers, with growth projected at 9.2%, supported by healthy credit and deposit growth.
Trade, hotels and transport are expected to grow around 7%.
Government capex and credit to support growth
Government capital expenditure and bank credit have remained important supports for economic activity.
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Capital expenditure by the Centre grew 23.7% in the first quarter of FY27, while bank credit continued to expand at a healthy pace. Credit to medium-sized industries grew 30.3% year-on-year, while lending to micro and small industries increased 23%.
RBI sees Q1 growth at 7%
The RBI has projected real GDP growth for the first quarter of FY27 at 7%, while it expects the economy to grow 6.7% in the full financial year. In its recent Monetary Policy Committee meeting held in August, the RBI said it expects Q2 FY27 GDP growth at 6.4%, Q3 FY27 GDP growth at 6.5% and Q4 FY27 GDP growth at 6.8%.
Q4FY26 GDP highlights
In the previous quarter (Q4FY26), India’s real GDP grew 7.8% year-on-year (January-March 2026. Real GDP estimated at Rs 87.77 lakh crore, compared with Rs 81.40 lakh crore in Q4 FY25.
For the full FY26, real GDP grew 7.7%, reaching an estimated Rs 323.12 lakh crore, compared with Rs 299.89 lakh crore in FY25.
Global risks ahead for India
While Q1FY27 growth is expected to remain strong, the Indian economic outlook needs to factor in risks from higher crude oil prices and geopolitical tension.
Brent crude averaged around $84 per barrel in July and had risen to around $87.8 per barrel. Bank of Baroda outlined that a sustained increase in oil prices could raise input costs and put pressure on inflation and corporate margins. Retail inflation also rose to 4.4% in July, its highest level since December 2024.
TOPICSGDPGDP growthIIPIndex Of Industrial ProductionManufacturing + 0 MoreThis article was first uploaded on August thirty-one, twenty twenty-six, at forty-eight minutes past ten in the morning. © IE Online Media Services (P) Ltd