Economic momentum picks up in December quarter on strong domestic demand: UBS report
Summary
Economic momentum in India picked up in the December quarter due to strong domestic demand and GST rate cuts, with growth expected to continue into 2026.
Key Points
- Economic momentum in India picked up sequentially during the December quarter, driven by festive season demand and GST rate cuts.
- UBS expects India's FY27 real GDP growth at 6.9% YoY, higher than consensus forecasts.
- High-frequency indicators such as vehicle sales, manufacturing PMI, and bank credit growth show strong economic activity in early 2026.
- External challenges from US tariffs were offset by domestic demand, tax adjustments, government expenditure, and supportive monetary policy.
