India Approaches Q3 FY27 From Position Of Relative Macroeconomic Resilience: Report
India's macroeconomic fundamentals nevertheless continue to provide an important buffer against external shocks, according to the Dun & Bradstreet 'Economic Observer: Q3 FY27 Review'.
The latest GDP release points to a firm start to the fiscal year, with real GDP expanding by 7.8 per cent in Q1 FY27, compared with 6.9 per cent in Q1 FY26, while nominal GDP growth stood at 10.3 per cent.
The upturn was supported by stronger production-side activity, investment momentum and resilient services-sector performance, even as the RBI's FY2026-27 growth projection of 6.7 per cent implies some moderation over the rest of the year, said the review.
Economic activity during Q1 FY2026-27 was firmly investment-led, with Gross Fixed Capital Formation growing by 11.9 per cent at constant prices, nearly double the 5.8 per cent growth recorded in Q1 FY2025-26.
Industrial production accelerated from 4.9 per cent in April 2026 to 7.3 per cent in June 2026, supported by manufacturing and capital goods, while construction and services activity also remained strong.
High-frequency indicators continued to point to resilient domestic demand, with GST collections, digital payments and electricity consumption holding up, and labour market conditions remaining broadly stable as the unemployment rate eased to 5.1% in Jul 2026.
Foreign exchange reserves remained sizeable, while strong services exports and remittance inflows continued to support external stability.
Going into Q3 FY27, the key macroeconomic risks are likely to arise from food inflation, adverse monsoon outcomes, elevated energy prices and persistent geopolitical uncertainty.
However, strong domestic demand, sustained public capital expenditure and healthy balance-sheet conditions should continue to support economic growth, the report noted.
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