2 days ago
Capital Formation and Exports Lift India’s Q1FY27 GDP Growth
India’s economy grew strongly during the first three months of fiscal year 2026-27.
Its GDP increased by 7.8% compared with the same period.
Investment in buildings, machines and other long-term assets was an important reason for the growth.
People’s spending also increased, and exports rose by 12%.
Financial services and manufacturing were among the sectors that expanded.
Government bodies and public companies increased their spending on projects.
Economists said the economy has remained resilient despite difficult conditions linked to the West Asia crisis.
They expect full-year growth could reach about 7%.
However, officials said food prices, the monsoon and uncertainty around the global economy should be watched.
India’s GDP grew 7.8% in the first quarter of fiscal 2026-27, supported by capital formation and exports.
Gross fixed capital formation rose 11.9%, while private final consumption expenditure increased 7.1%.
Exports grew 12%, and aggregate capital expenditure by the Centre, states and central public-sector enterprises rose 16.9%.
Financial services, real estate, information technology and professional services grew 12.1%, while manufacturing expanded 9.2%.
The Ministry of Statistics and Programme Implementation revised GDP growth for FY24, FY25 and FY26 using updated indicators.
- Who
- India’s economy, the Ministry of Statistics and Programme Implementation, Chief Economic Adviser V Anantha Nageswaran and economists including Devendra Pant and Madan Sabnavis.
- What
- India recorded 7.8% GDP growth in Q1FY27, driven mainly by capital formation, exports, consumption and strong sectoral performance.
- Where
- India.
- When
- The result covers the first quarter of fiscal year 2026-27; the National Accounts Statistics 2026 were released on Monday.
- Why
- Growth was supported by higher investment and capital expenditure, stronger exports, private consumption and expansion in services and manufacturing.
Key facts
- Q1FY27 GDP growth
- 7.8%
- Gross fixed capital formation growth
- 11.9%
- Private final consumption growth
- 7.1%
- Export growth
- 12%
- Fastest-growing sectors
- Financial services, real estate, information technology and professional services grew 12.1%.
- Manufacturing growth
- 9.2%
- Aggregate public-sector capital expenditure
- Capital expenditure by the Centre, states and central public-sector enterprises grew 16.9% in Q1FY27, compared with 11.4% in FY26.
- Revised GDP growth
- FY24 was revised to 7.3%, FY25 to 7.2% and FY26 to 7.8%.
Quotes
V. Anantha Nageswaran
India’s Chief Economic Adviser
“GDP growth in the first quarter of 2026-27 suggests that despite adverse economic situation due to West Asia crisis, Indian economy has remained resilient. Strong investment momentum since the second quarter of FY26 has continued and shown an upward trajectory. The government (both centre and states) along with central public sector enterprises has continued to undertake capex.”
businesstoday.in
“Growth has been spearheaded by capital formation which has increased to 34.3% in nominal terms from 31.4% last year with growth of 20.4%. This is a major takeaway as this involves both private and government expenditure with the former being driven by data centres and power besides metals”
businesstoday.in
Sources
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