Global professional services firm EY on Monday raised India’s real GDP growth projection for FY26 to 6.7 per cent, up from its earlier estimate of 6.5 per cent, citing the impact of GST 2.0 reforms.
The revision reflects expectations of monetary easing and stronger domestic demand driven by GST rate rationalisation, despite global uncertainties, according to EY’s ‘Economy Watch’ – September edition.
“With Q1 FY26 real GDP growth at 7.8 per cent, and stimulation of demand through GST reforms on the one hand, constrained by global headwinds affecting India’s export prospects in both goods and services, we expect India to still record annual real GDP growth of 6.7 per cent in FY26,” the firm said.
“GST 2.0 reforms are boosting disposable incomes and domestic demand, while trade diversification efforts are opening new opportunities. India is well positioned to sustain its growth momentum in FY26. Strategic investments in technology and targeted policy measures will be key to translating reforms into long-term economic gains,” said DK Srivastava, Chief Policy Advisor at EY India.
In August 2025, the manufacturing PMI rose to 59.3, its highest since February 2008, while the services PMI climbed to 62.9, the strongest since June 2010.
Overall industrial production growth improved to 3.5 per cent in July 2025 from 1.5 per cent in June, led by a sharp rebound in manufacturing output.
According to the OECD, India’s seasonally adjusted real GDP growth at 7.3 per cent in the April–June 2025 quarter was the highest among all G20 economies.
–IANS