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India's Q3 GDP Growth Hits 8.3%, Fueled by GST Cuts and Strong Demand

India's GDP growth for the third quarter of FY26 is estimated at a robust 8.3%, according to a Union Bank of India report. This strong performance is attributed to demand fueled by recent goods and services tax rate cuts. Nominal GDP growth is estimated to have slowed to 8.5% due to easing inflation and a lower GDP deflator. The estimates come ahead of official data release and are based on the old base year, with a revision to a 2022-23 base forthcoming.

Key Points: India Q3 GDP Growth 8.3% on GST Cuts, Demand Surge

  • Q3 GDP growth estimated at 8.3%
  • Driven by GST rate cuts boosting demand
  • GVA growth improves to 8%
  • Nominal GDP growth slows to 8.5%
2 min read

Q3 GDP growth likely at 8.3 pc as GST cuts boost demand: Report

India's Q3 FY26 GDP growth estimated at 8.3%, driven by GST rate cuts boosting demand. Nominal growth slows as inflation eases.

"GDP data for Q3 FY26... likely clocked 8.3 per cent, sharply higher from the same period previous year - Union Bank of India report"

New Delhi, Feb 27

India's gross domestic product growth for the third quarter of the current financial year will likely remain elevated at 8.3 per cent, driven by demand fuelled by goods and services tax rate cut despite an unfavourable base effect, a report has said.

The report from Union Bank of India said that gross value added growth for Q3 FY26 likely improved to 8 per cent from 6.5 per cent in Q3 FY25, though it may be marginally slower than the 8.1 per cent recorded in the second quarter.

"GDP data for Q3 FY26, due on February 27, likely clocked 8.3 per cent, sharply higher from the same period previous year (Q3 FY25: 6.4 per cent)," the report said.

Nominal GDP growth is estimated to have slowed to 8.5 per cent, down from 8.7 per cent in Q2 and 10.3 per cent in the same period last year, due to a fall in GDP deflator amid easing inflation, the report further said.

The bank noted its estimates are based on the old base year, given the uncertainty with respect to the impact from the base year revision on GDP numbers following the base‑year revision by the Ministry of Statistics and Programme Implementation. While the growth outlook for FY26 remains broadly resilient and early indicators for FY27 suggest continued momentum, the annual estimates have to be revisited once clarity emerges on the forthcoming GDP base revision, the report said.

The Ministry of Statistics and Programme Implementation (MoSPI) will release the Gross Domestic Product (GDP) data with the revised base year of 2022-23 on Friday.

FY 2022-23 has been chosen as the base year of the new series and revised inputs for the new series aim to strengthen estimates across institutional sectors, especially private corporations and MSME-heavy activities where data gaps have long persisted, the government had earlier said.

- IANS

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Reader Comments

S
Sarah B
Good numbers, but I'm a bit confused. The article mentions the estimates are on the old base year. How much will the new 2022-23 base year revision change these figures? Clarity from MoSPI tomorrow will be key.
P
Priya S
Growth is one thing, but is it translating to better jobs and higher salaries for the middle class? The nominal GDP growth slowing to 8.5% is a point to note. Feeling the pinch of inflation easing, but daily costs are still high yaar.
R
Rohit P
The focus on improving data for MSMEs and private corporations in the new series is a very positive step. For too long, the contribution of our small businesses has been underestimated in official stats. Jai Hind!
M
Michael C
Respectfully, while the headline number is strong, the sequential slowdown from Q2 (8.1% to estimated 8.3% GVA, but note it says 'marginally slower') and the fall in nominal growth due to deflator changes warrants cautious optimism. The base revision adds another layer of uncertainty.
K
Kavya N
Demand is definitely up! Just saw the crowds at the mall this weekend. People are spending, especially on consumer goods. Hope this growth is broad-based and reaches all sectors and regions. 🤞

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