DBS Group Research, led by Radhika Rao and Daisy Sharma, projects that India's real GDP growth will slow in early 2026 following a robust second half of FY26 [1]. According to DBS's GDP Nowcast, the revised and rebased GDP series indicated a modest but meaningful firming in activity during the second half of FY26, with real GDP rising 7.8% year-on-year in October-December 2025 (3QFY26), compared to 8.4% in July-September 2025 (2QFY26) [1]. This growth was supported by indirect tax rationalization, festive demand, stronger investment activity, and improved rural farm outcomes [1].
Looking ahead, DBS expects growth momentum to soften in the first and second quarters of 2026, driven by weaker industrial activity, trade, and government spending [1]. Their Nowcast model estimates real GDP growth will moderate to 7.2% in 1Q and 6.9% in 2Q of 2026 [1]. The official real GDP data for 1Q26 (4QFY26) is anticipated to be released later this month [1].
The forecasted slowdown suggests a shift from the firm growth seen in late FY26, with DBS highlighting the importance of monitoring upcoming economic data releases for further insights into India's growth trajectory [1].
CONCLUSION
DBS Group Research anticipates India's GDP growth to ease in early 2026 after a strong second half of FY26, with projections of 7.2% and 6.9% growth in the first two quarters of 2026. The moderation is attributed to weaker industrial activity, trade, and government spending. Investors and analysts will be watching the upcoming GDP release for confirmation of these trends.