ICRA sees Q4 growth slowing to three-qtr low of 7%

New Delhi: India’s economic growth likely slowed to a three-quarter low of 7% year-on-year in Q4FY26 from 7.8% in the previous quarter, as slower expansion in the industrial and services sectors offset a slight improvement in agriculture, said ICRA on Tuesday. ICRA’s forecast is below the National Statistics Office‘s (NSO) implicit estimate of 7.3%.

The agency expects FY26 gross domestic product (GDP) growth at 7.5%, slightly lower than the NSO’s estimate of 7.6%.

The NSO is scheduled to release provisional FY26 GDP estimates and quarterly estimates for Q4FY26 on June 5.

Aditi Nayar, chief economist at ICRA, said growth in several indicators pertaining to the services sector, mining and electricity improved in Q4FY26 compared to Q3.

“However, a slower rise in manufacturing volumes, contraction in exports, and nascent signs of margin pressure amid the West Asia fallout, may have weighed on industrial gross value added (GVA) growth performance in the quarter,” she said.

ICRA has also cut its FY27 growth forecast to 6.2% from the 6.5% expected earlier. It assumes crude oil prices to average $95 per barrel in FY27, up from earlier estimates of $85 per barrel, citing persistent price pressures amid the West Asia stalemate.