New Delhi [India], August 21 (ANI): India's GDP is estimated to grow by 7-7.2 per cent in Q1FY27 against an increase of 6.8 per cent in Q1FY26, according to a report by Bank of Baroda. Growth in Q1 is expected to be higher than last year on the back of certain sectors outperforming others, as the Ministry of Statistics and Programme Implementation prepares to release its provisional estimates.

The report highlighted that the pickup in economic momentum is largely anchored by manufacturing, electricity, and construction sectors, supported by sustained government capital expenditure and healthy financial sector growth.

'This will be helped by pickup in growth in manufacturing, electricity and construction sectors which are projected to report higher growth in Q1FY27 vis-a-vis Q1FY26,' the Bank of Baroda report stated.

'Steady improvement in government capex along with healthy credit and deposit growth will push growth higher. However, delayed monsoon and aggravated heatwave conditions will pull agriculture growth lower in this quarter,' the report added.

According to the report, the agriculture sector is expected to register a growth of 3.5 per cent compared with 4.4 per cent in the corresponding period of the previous year.

Industrial growth is projected at 6.8 per cent, with the manufacturing sector estimated to grow at 7.8 per cent and mining at 3 per cent. Electricity and construction sectors are forecast to record strong expansions of 7 per cent and 6 per cent, respectively. The services sector is expected to expand by 8 per cent, propelled by a 9.2 per cent increase in financial, real estate, and professional services.

'The ongoing West Asia crisis has resulted in price spikes and volatility across global commodities, especially crude, fertilisers and natural gas. International crude and urea prices surged by 44.7 per cent and 73.5 per cent respectively in Q1FY27,' the report noted.

'Manufacturing sector continues to exhibit resilience even as it faces uncertainty due to the ongoing West Asia crisis along with cost pressure,' the report emphasised, adding that a capex push alongside steady investment activity will drive overall growth.

For the full financial year FY27, as per BoB, the economy is projected to expand by 6.6 per cent to 6.8 per cent as growth turns broad-based with stable inflation and currency conditions. (ANI)