DBS Group strategists Taimur Baig and Nathan Chow expect India’s 1QFY27 Gross Domestic Product (GDP) to confirm that the economy has weathered geopolitical disruptions better than initially feared. They note stronger consumption gauges, improving production, and ongoing support from services and exports, even as muted wealth effects, soft fuel demand and higher energy costs weigh on some sectors and the external balance.

Growth holding up despite disruptions

“GDP growth in 1QFY27 is likely to suggest that the economy weathered geopolitical disruptions better than initially factored in.”

“Our consolidated consumption gauge strengthened during the quarter, even as sentiment indicators, pointed to a more cautious backdrop and wealth effects remained muted amid subdued capital market performance.”

“Production activity picked up, although demand for industrial fuels and downstream petroleum products remained soft following a series of price adjustments.”

“Meanwhile, the services sector continued to provide support to overall growth, as reflected in robust bank credit expansion, PMIs remaining in expansionary territory, higher e-way bill generation, and resilient export growth.”

“Corporate earnings indicators were also broadly constructive, with aggregate revenue growth across listed firms remaining resilient, although higher energy prices weighed on the profitability of oil marketing companies.”