ICRA Projects India's Q1 FY27 GDP Growth At 6.4-6.6% Amid Strong Economic Activity

New Delhi, Jul 23 (KNN) Rating agency ICRA on Wednesday projected India's economy to have expanded by 6.4-6.6 percent in the April-June quarter of FY27, supported by strong economic activity despite elevated energy prices and supply constraints affecting margins in some sectors.

The forecast follows a stronger-than-expected 7.8 percent growth in real Gross Domestic Product (GDP) during the January-March quarter of FY26.

Business Activity Hits 32-Month High
According to Icra's Business Activity Monitor, economic activity grew 12 percent year-on-year in June 2026, marking a 32-month high and improving from 9.4 percent growth in May. 

The index, which tracks 16 high-frequency indicators, showed broad-based improvement, with 13 indicators recording faster annual growth during the month.

The agency attributed the pickup to factors including the temporary US-Iran ceasefire, a 40 percent rainfall deficit in June that extended construction and mining activity, and a favourable base effect.

Growth Expected to Moderate from Previous Quarter
Despite the robust performance, Icra expects GDP growth in the first quarter of FY27 to moderate from the 7.8 percent recorded in the preceding quarter.

For the April-June period, the Business Activity Monitor recorded 10 percent year-on-year growth, up from 9.1 percent in the fourth quarter of FY26, with 10 of the 17 non-agricultural indicators showing improved performance.

Based on revised Index of Core Industries data, which showed core sector output growth accelerating to 5 percent in June, Icra expects the Index of Industrial Production (IIP) to expand by 5-6 percent during the month.

Electricity Demand Rises, Vehicle Registrations Lag
The report also noted that electricity demand rose 12.2 percent between July 1 and 19, compared with 10.9 percent growth in June, supported by higher temperatures and deficient rainfall.

However, vehicle registrations increased by a relatively modest 5 percent year-on-year during the same period, compared with 23 percent growth recorded in June.

(KNN Bureau)