Q3 GDP Growth Seen at 8.3% as GST Rate Cuts Spur Demand: Report

New Delhi: India’s gross domestic product (GDP) growth for the third quarter of the current financial year (Q3 FY26) is expected to stay robust at 8.3 per cent, supported by demand generated from goods and services tax (GST) rate cuts, even as an unfavourable base effect persists, according to a report.

The report by Union Bank of India said gross value added (GVA) growth in Q3 FY26 is likely to rise to 8 per cent from 6.5 per cent in Q3 FY25, though it may be slightly lower than the 8.1 per cent recorded in the previous quarter.

“GDP data for Q3 FY26, due on February 27, is likely to clock 8.3 per cent, sharply higher than the same period last year (Q3 FY25: 6.4 per cent),” the report noted.

Nominal GDP growth is estimated to have moderated to 8.5 per cent, compared with 8.7 per cent in Q2 and 10.3 per cent in the year-ago period, largely due to a decline in the GDP deflator amid easing inflationary pressures.

The bank said its projections are based on the old base year, citing uncertainty around the impact of the revised base year on GDP figures following changes introduced by the Ministry of Statistics and Programme Implementation (MoSPI). While the growth outlook for FY26 remains resilient and early indicators point to sustained momentum in FY27, annual estimates may need reassessment once clarity emerges on the revised GDP series.

MoSPI is scheduled to release GDP data using the revised base year of 2022–23 on Friday. The government has said the updated base year and inputs are aimed at strengthening estimates across institutional sectors, particularly private corporations and MSME-dominated activities where data gaps have existed.

With inputs from IANS