New Delhi [India], October 29 (ANI): India's economy is estimated to have grown by 7.35 per cent in the July-September quarter of the current financial year (FY27), supported by strong domestic demand, industrial activity and higher consumption, according to the Finance Ministry's October Monthly Economic Review.

The estimate, based on the ministry's nowcasting model, comes after the economy recorded growth of 7.8 per cent in the April-June quarter. The ministry had earlier projected growth of around 7.3 per cent for the second quarter in its September review.

'Following real GDP growth of 7.8 per cent in Q1 FY27, the Department's nowcasting model, introduced in the Economic Survey 2025-26, nowcasts real GDP growth of 7.35 per cent in Q2 FY27,' the report stated.

The review highlighted that several key economic indicators, including industrial production, electricity consumption, port traffic, GST collections and automobile sales, recorded stronger growth during the second quarter.

'Taken together, these indicators point to sustained growth momentum in Q2 FY27,' it said.

Gross GST collections grew by around 15 per cent during the July-September quarter, compared with approximately 8.4 per cent in the preceding quarter. Domestic automobile sales also increased by around 25 per cent year-on-year, supported by demand across rural and urban markets.

The report noted that business activity showed signs of improvement towards the end of the quarter, with manufacturing and services activity strengthening in September.

'The recovery in PMI readings, alongside improved business sentiment, points to a cautiously favourable outlook for the coming months,' it said.

On the outlook for the remainder of FY27, the ministry said domestic consumption, investment activity and structural reforms were expected to support economic growth.

'Healthy credit growth and recent trade agreements are expected to provide additional support to consumption, investment and exports,' the review stated.

However, the ministry cautioned that global uncertainties, including higher crude oil prices, geopolitical tensions and inflationary pressures, could continue to pose challenges.

'Overall, while persistent geopolitical frictions, energy price volatility and global financial tightening remain key headwinds, the Indian economy may remain well-positioned to sustain its expansionary trajectory through the rest of FY27,' the report said.

The International Monetary Fund has projected India's economy to grow by 7.0 per cent in FY27, while the World Bank, OECD and Reserve Bank of India have forecast growth of 7.1 per cent. (ANI)