ICRA sees GDP growth easing to 7.2% in Q3 FY26

New Delhi: ICRA has projected India’s GDP growth to moderate to 7.2 per cent year-on-year in Q3 FY26, down from 8.2 per cent in Q2, amid slower expansion in services and agriculture despite improved industrial output.

The agency expects services growth to ease to 7.8 per cent from 9.2 per cent in Q2 FY26, while agriculture growth may soften to 3 per cent from 3.5 per cent. While, industrial growth is likely to rise to a six-quarter high of 8.3 per cent from 7.7 per cent.

Chief Economist Aditi Nayar said the slowdown reflects an unfavourable base effect, contraction in central government capital expenditure, subdued state revenue spending and weak merchandise exports. Government capex fell 23.4 per cent year-on-year in Q3 to Rs 2.1 trillion against Rs 3.1 trillion in Q2.

Combined non-interest revenue spending of the Centre and 24 states rose marginally by 0.3 per cent year-on-year in Q3. Meanwhile, services exports growth eased to a seven-quarter low of 7.5 per cent, primarily due to a high base. Festive demand supported growth, keeping it above 7 per cent during the quarter. Agencies