ICRA estimates India's GDP growth at four-quarter low of 7 per cent in April-June

New Delhi: Rating agency ICRA on Monday estimated India's GDP growth at a four-quarter low of 7 per cent in the April-June quarter of the current fiscal, sliding from 7.8 per cent in the March quarter of FY26, on a slower pace of expansion in the services sector.

It projected the industrial sector to grow at 7.7 per cent, agriculture at 4 per cent, and the services sector to grow at 7.9 per cent in the June quarter.

For the full 2026-27 fiscal, ICRA projects GDP growth to moderate to 6.7 per cent, from 7.7 per cent in FY26.


ICRA Chief Economist Aditi Nayar said that high-frequency indicators across the industrial and services sectors revealed a healthy picture of domestic volume growth in the June quarter of 2026-27, belying the concerns about the fallout of higher commodity prices during the quarter due to the West Asia conflict.

"ICRA projects the real GDP expansion to have eased to 7 per cent in Q1 2026-27 from 7.8 per cent in Q4 2025-26, in line with the Monetary Policy Committee's growth forecast for the quarter," Nayar said.

ICRA said the 7 per cent growth in the June quarter would be a four-quarter low.

Business sentiments of services companies weakened materially in the June quarter of FY27, with the pace of optimism dipping to the lowest level in five years, amid headwinds owing to the West Asia crisis as well as persistent wage cost pressures.

"Based on the assumption of an average crude oil price of USD 80-85/barrel in 2026-27, ICRA expects the real GDP growth to moderate to 6.7 per cent in the fiscal from 7.7 per cent in 2025-26, with risks tilted to the downside amid continued tensions in West Asia and monsoon-related uncertainty," Nayar said.

However, the nominal GDP expansion is projected to accelerate to a four-year high of 13 per cent in 2026-27 from 8.9 per cent in 2025-26, amid expectations of a hardening in the inflation prints, she added.