India’s GDP may fall for third time in a row:Experts blame US-Iran war El Niño for country’s growth slowdown

The government of India is all set to release India’s Gross Domestic Product (GDP) growth rate figures for the first quarter (Q1) of the financial year 2026-27 (FY27) at 4 pm on Monday, 31 August, 2026. Analysts expect that the country’s economic size growth rate can fall for the third time in a row in the April-June 2026 quarter. Along with the macroeconomic data for Q1 FY27, the government might also publish second advance estimates for the January-March 2026 quarter. What do analysts say? Multinational professional services firm EY says India’s real GDP growth is likely to remain resilient at 7-7.2% in FY27, supported by buoyant domestic demand and continued government focus on capital expenditure. Bank of Baroda also estimates India’s GDP to grow by 7-7.2% in Q1FY27. According to the bank, the growth in Q1 is expected to be higher than last year on the back of certain sectors outperforming others. The manufacturing, electricity and construction sectors are projected to report higher growth in Q1FY27. While delayed monsoon and aggravated heatwave conditions will pull agriculture growth lower in this quarter. -Bank of Baroda report Whereas, Fitch Group subsidiary India Ratings Research has projected India’s GDP growth to slow down to 6.8% in the current fiscal year, citing risks from fuel and food inflation stemming from West Asia conflict’s uncertainty, weak currency, and the likely impact of El Niño on agriculture. India’s GDP growth would average 7% annually over the next three years. While in the last 5 years till fiscal 2026 it was 7.9%. -SP Global Ratings How India’s GDP fared in the previous quarter? India’s real GDP growth rate had fallen sequentially to a 3-quarter low of 7.8% in the March quarter (Q4) of the Financial Year 2025-26 (FY26). How India’s GDP fared exactly a year ago: In the year-ago quarter ie in Q1 FY26, the country’s economy had expanded at a rate of 6.8%. The NSO calculates the growth rate at constant prices and the size of the economy at current prices. 3rd GDP figures based on new base year The Q1 FY27 GDP data will be the third time that the Central Government will publish the macroeconomic data based on the new base year. The government had changed the base year from 2011-12 to 2022-23. This was aimed at providing a more accurate gauge of overall growth momentum and the current structure of the Indian economy. RBI’s growth projections: According to RBI’s latest economic growth forecast, the Indian economy in the current financial year is projected to grow at 6.7%, supported by robust domestic demand, manufacturing and services activity and strong exports, despite heightened global uncertainty stemming from the West Asia conflict and trade tensions. How Indian economy fared since Covid? The COVID-19 pandemic hit India hard, causing the economy to shrink. But since then, India has been on a path to recovery. Let’s take a look at how the economy has grown. Big Dip: How COVID hurt the economy In 2020, when the pandemic kicked in, India’s economy took a big hit. Lockdowns and restrictions forced businesses to close, people lost jobs, and overall spending fell. This led to a shrinking of the GDP, which is the total value of goods and services produced in a country. In the Covid year ie FY21, the GDP had shrinked by 5.8%. But after that, the economy recovered. The Rebound: Economy starts to grow again After the initial shock, things started to improve. As the lockdowns eased and people started getting vaccinated, businesses began to reopen. The government also took steps to help the economy, like spending money on infrastructure projects and providing support to small businesses. As a result, the GDP growth rate rose to as high as 9.70% in FY22. Albeit, in the fiscal after that, the metric fell to 6.5%. And, in the last financial year, the GDP grew to 7.7% as per the first advance estimates of the NSO.