Rating agency ICRA on Tuesday estimated India’s GDP growth to ease to 7 per cent in the July–September quarter of FY26, down from 7.8 per cent in the previous quarter, citing softer government expenditure.

According to ICRA, the services and agriculture sectors are expected to see a marginal slowdown in the second quarter, even as industrial activity remains robust, supported by manufacturing, construction and favourable base effects. This resilience in industry is likely to underpin overall economic performance during the period.

The agency reiterated its projection that GDP growth would moderate to 7 per cent year-on-year in Q2 FY2025-26, compared to the strong expansion seen in Q1.