With tax cuts and a factory boom offsetting oil volatility, analysts expect momentum to hold – if El Nino doesn’t wreck the harvest
3-MIN READ3-MINBiman MukherjiPublished: 5:34pm, 2 Sep 2026India’s stronger-than-expected first quarter growth has bolstered analysts’ confidence that it can sustain its momentum through the rest of the financial year and remain the world’s fastest-growing major economy – even as it remains exposed to high oil prices caused by the US-Iran war.The Indian economy grew 7.8 per cent in the April-June quarter, comfortably beating the Reserve Bank of India’s forecast of 7 per cent growth, despite the disruption that the Middle East conflict has caused to global energy markets and financial sentiment worldwide.
“While energy will undoubtedly be a headwind for the economy, I suspect that it will sustain the momentum … and surprise analysts on the upside,” said Jamus Lim, an associate professor of economics at ESSEC Business School Asia-Pacific, who predicted annual growth “clocking in closer” to 8 per cent.
