UBS raises India’s real GDP growth forecast in FY26 to 6.4%

UBS, the global financial services firm, has raised its forecast for India’s real gross domestic product (GDP) growth in FY26 to 6.4 per cent, up from its earlier estimate of 6 per cent.

The development comes following signs of resilient economic momentum and a stronger-than-expected performance in the March 2025 quarter.

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According to UBS’s India Composite Economic Indicator (CEI), the economic momentum held up in April, with the seasonally adjusted index rising 1.1 per cent month-on-month, close to its March quarter average, suggesting stable economic activity.

The outlook also assumes that global trade tensions will not escalate and oil prices will stay low, with UBS expecting an average of USD 65 per barrel in FY26.

However, there are still risks to investment growth. UBS sees capital spending slowing due to global uncertainty, budget limits in some states, and strong growth last year in housing.

Expecting that the household spending will recover, especially in rural areas, guided by a good monsoon and lower food prices, the forecast has been updated. Urban demand is also likely to improve with possible government support, like tax cuts and lower inflation.

Recently, the data released by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) said real GDP has been estimated to grow by 6.5 per cent in the Financial Year 2024-25, while the nominal GDP has witnessed a growth rate of 9.8 per cent.

Further in Q4, the Real GDP and Nominal GDP have been estimated to grow by 7.4 per cent and 10.8 per cent respectively.

Real GDP is estimated to attain a level of Rs 187.97 lakh crore in FY25, against the First Revised Estimates of GDP for FY24 at Rs 176.51 lakh crore.

The Nominal GDP is estimated to attain a level of Rs 330.68 lakh crore in FY25, against Rs 301.23 lakh crore in FY24.