CareEdge Economic Meter (CEM) Indicates Healthy Momentum in Q2 FY26 by CareEdge Ratings
* CEM expanded by 3.2% YoY in Q2 FY26 marginally lower than 3.3% growth in Q1 FY26.
* The CEM is further analysed through a machine learning method to project the expected GDP growth for Q2 FY26.
* According to our model, real GDP growth for Q2 FY26 is projected at 7.2%. The GVA growth for Q2 FY26 is projected at 7.3%.
* We expect GDP growth to moderate in H2 FY26, averaging 6.3%.
* We expect real GDP and GVA growth for FY26 at 6.9% YoY.
* Nominal GDP growth for FY26 projected at 7.7%, given sharp moderation in inflation. A low deflator is likely to push up real growth numbers.
* Rationalisation of income tax rates, GST rate cuts, healthy rural economic activity, easing inflationary pressures, and the RBI’s interest rate cut to support growth in FY26.
* Heightened external economic uncertainties remain a key monitorable. Furthermore, China's excess capacity and the subsequent redirection of exports to markets like India remain significant concerns.
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