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ICRA Forecasts India's GDP Growth to Moderate to 7.0% in Q2FY26.

Economy | Dated: 20 Nov 2025

The rating agency ICRA projected that India's Gross Domestic Product (GDP) growth will moderate to 7.0% in the second quarter of the fiscal year 2026 (Q2FY26), down from 7.8% recorded in the preceding quarter (Q1FY26). This moderation is primarily attributed to a slowdown in domestic consumption and the lingering effects of high-interest rates on the industrial sector. Despite the moderation, ICRA noted that the industrial Gross Value Added (GVA) is expected to remain robust at 7.8%, indicating continued strength in the manufacturing and construction sectors. The forecast reinforces India's position as the fastest-growing major economy globally.

🎯 Key Highlights:

  • ICRA forecasted GDP growth for Q2FY26 at 7.0%.
  • The growth moderated from 7.8% recorded in Q1FY26.
  • Industrial Gross Value Added (GVA) is expected to remain robust at 7.8%.

💡 Other Important Facts:

  • The forecast is crucial for the Reserve Bank of India's monetary policy review.
  • ICRA maintained its full-year GDP forecast, suggesting a pickup in the second half (H2).
  • The growth gap between GDP and GVA slightly widened in the reported period.

📚 Test Your Knowledge:

According to ICRA, what is the forecasted GDP growth rate for India in Q2FY26?

Correct Answer: 7.0%

🚀 Quick Recap:

About ICRA

  • (i) Nature: An independent credit rating agency in India. (ii) Role: Provides ratings, research, and data services.
  • (iii) Moderation Cause: Slowdown in consumption and high interest rates. (iv) Positive Trend: Strong performance in manufacturing and construction sectors.