DBS Group Research economists Radhika Rao and Daisy Sharma have assessed India's real GDP trajectory using their GDPNowcast model, highlighting a moderation in growth expected in early 2026 [1]. According to their analysis, India's real GDP rose 7.8% year-on-year in the fourth quarter of FY25 (October-December 2025), down from 8.4% in the previous quarter (July-September 2025) [1]. The strong performance in 4QFY25 was attributed to indirect tax rationalization, festive demand, firmer investment activity, and improved rural farm outcomes [1].
DBS's rebased GDP series indicates a modest but meaningful firming in activity for FY26, with real GDP growth revised up to 7.6% from the first advance estimate of 7.4%, aligning closely with DBS's forecast of 7.7% [1]. However, their Nowcast model projects that growth will moderate to 7.2% in the first quarter of 2026, primarily due to weaker industrial activity, reduced freight traffic, declining exports of goods, and softer passenger and commercial vehicle sales [1].
For the full calendar year 2026, DBS expects growth to average 6.5%, down from 7.8%, though they note upside risks to this forecast [1]. No specific market reactions or analyst opinions beyond the forecasted moderation and upside risks are mentioned in the article [1].
CONCLUSION
DBS Group Research forecasts a moderation in India's GDP growth in early 2026, with full-year growth expected to average 6.5%, down from 7.8%. The slowdown is attributed to weaker industrial activity, freight, exports, and vehicle sales. While growth is easing, DBS notes potential upside risks to their forecast.