India’s Q2 GDP growth likely to be 7.2%: Mint poll

India's economic growth will likely stay robust at 7.2% in the July-September quarter, even if slightly lower than 7.8% in the preceding one, led by rural demand and the statistical effect of a low base and low inflation, a poll of 15 economists by Mint showed. The official GDP data releases later on Friday.

The economists projected India’s GDP growth in the range of 7% to 7.7% in the September quarter.

The high projected growth number is likely due in part to a low base. GDP growth had slowed to 5.6% in the same quarter last year from 6.5% in the preceding quarter. The fact that retail inflation slowed to 1.7% in Q2FY2026 from 2.7% in Q1, and wholesale inflation to 0.02% from 0.26%, will also boost the real GDP growth figure, which adjusts current prices for inflation.

Growth beyond statistics

Beyond statistical effects, high-frequency indicators did show improved growth momentum even before the recent GST rate cuts kicked in. “Pick-up in rural demand indicators have become broad-based, supported by rise in rural wages and second consecutive year of good monsoons,” said Gaura Sen Gupta, an economist at IDFC First Bank.

Yuvika Singhal, an economist at QuantEco Research, pointed out that softer inflation conditions, transmission of earlier monetary policy easing, and inventory build-up in some sectors in anticipation of festive season demand—amplified by GST cuts at the end of September—also contributed to increased economic activity in the quarter.

Slow growth in government capital expenditure (capex) compared to the previous quarter (31% vs 52%) is likely to weigh on growth, Aditi Nayar, chief economist at Icra, said in a report. Moreover, urban indicators largely remained weak during the quarter, as reflected in passenger vehicle sales and air travel.

However, growth is still likely to surpass expectations as the impact of US tariffs on exports was not felt during the quarter, with exports rising 8.7% (as opposed to a 2.2% contraction in the previous quarter) due to front-loading of shipments as well as attempts to diversify trade.

Rate-cut conundrum

If the poll projection proves accurate, GDP will be marginally above the Reserve Bank of India’s (RBI’s) projection of 7% GDP growth for the quarter. While another strong growth print may make the RBI's rate-cut decision harder at the December meeting, despite low inflation, economists believe the expected slowdown in growth in the second half of the year and weak impulse in nominal GDP growth keep the the door open for a cut.

According to Kaushik Das, India chief economist at Deutsche Bank, nominal GDP growth will likely be weak and come in under 9%. In Q1, nominal GDP growth was 8.8%, down from 10.8% in the preceding quarter, owing to low inflation.

“Based on the trend of economic growth, the rationale for monetary easing is not very strong,” Paras Jasrai, associate director at India Ratings and Research, said earlier this month. “However, to prevent the economy going deep in sluggish and weak growth, the RBI may go for a 25-50 basis points cut in the repo rate in its December 2025 monetary policy,” he added.