DBS Group Research economists Radhika Rao and Daisy Sharma have projected that India’s economic growth, which remained robust in the fourth quarter of fiscal year 2025, is expected to moderate in the first quarter of 2026. Using their GDP Nowcast model, they highlight that while India’s current momentum is strong, underlying factors such as global demand slowdowns and domestic policy adjustments may temper growth in the coming months. This projection is based on a combination of real-time economic indicators and historical trends. For global markets, India’s growth trajectory is a critical indicator for emerging market investments and commodity demand. A slowdown in India could impact sectors like energy, metals, and textiles, which are significant for Gulf and MENA investors. Traders should monitor policy responses from the Reserve Bank of India (RBI) and fiscal measures to mitigate growth risks. Additionally, the moderation in growth may affect global supply chains and investment flows into Asian equities. MENA investors should watch for potential spillover effects on regional trade and investment opportunities in Indian infrastructure and technology sectors. Key indicators to track include India’s import demand for oil and metals, as well as corporate earnings from Gulf companies with exposure to Indian markets. The next quarter’s GDP data and RBI policy statements will be pivotal for assessing the depth of the slowdown.
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