CareEdge Economic Meter

November 2025
CareEdge Economic Meter (CEM) Indicates Healthy
Momentum in Q2 FY26

25 • CEM expanded by 3.2% YoY in Q2 FY26 marginally lower than 3.3%

growth in Q1 FY26.
20
• The CEM is further analysed through a machine learning method to
15
7.2
project the expected GDP growth for Q2 FY26.
10
• According to our model, real GDP growth for Q2 FY26 is projected at
5
7.2%. The GVA growth for Q2 FY26 is projected at 7.3%.
YoY

0 3.2
• We expect GDP growth to moderate in H2 FY26, averaging 6.3%.
-5
• We expect real GDP and GVA growth for FY26 at 6.9% YoY.
-10

-15 • 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.
-20

-25 • Rationalisation of income tax rates, GST rate cuts, healthy rural
economic activity, easing inflationary pressures, and the RBI’s interest

Jan-24
May-17

Jan-19

Apr-20

May-22

Apr-25
Sep-15

Sep-20

Sep-25
Oct-17

Oct-22
Dec-16

Jun-19

Dec-21

Jun-24
Feb-16

Feb-21
Nov-19

Nov-24
Jul-16

Mar-18

Jul-21

Mar-23
Aug-18

Aug-23
rate cut to support growth in FY26.

• Heightened external economic uncertainties remain a key monitorable.

Real GDP growth CEM growth Furthermore, China's excess capacity and the subsequent redirection of
exports to markets like India remain significant concerns.
Source: CareEdge

Note: CareEdge Economic Meter (CEM) is a factor-based index covering 39 high-frequency economic indicators to
track the state of the economy on a real-time basis.
2
Economic scenario in Q2 FY26 (1/2)

Areas showing Broad Improvement

• Kharif sowing of food grains was up 2.5% YoY in 2025 amidst a good monsoon.
• Domestic tractor and fertilizer sales increased by 30.7% YoY and 19.4% YoY, respectively, in Q2 FY26—compared with 9.2% growth in tractors
Agriculture and a 14% contraction in fertilizer sales in Q1.
• Government expenditure on agriculture and allied sectors is up 18.7% in Q2 FY26, higher than 11.8% in Q1.
• Agricultural exports up 17.3% YoY in Q2 compared to 8.6% YoY in Q1.
• IIP Manufacturing grew by 4.9% in Q2 FY26 vs 3.3% in Q1.
• Non-petroleum, non-agriculture exports grew by 12.8% in Q2, up from 8.4% in Q1.
• Despite the imposition of a 50% tariff on Indian exports to the US toward the end of August, non-petroleum, non-agricultural merchandise exports
Manufacturing
maintained their momentum—largely due to front-loading of exports ahead of the tariff implementation.
• Steel production grew by 14.7% in Q2, higher than 7.2% in Q1.
• Domestic GST collections registered healthy growth of 7.7%, albeit moderating from 9.7% in Q1.

• Central capex remained robust, rising 31% in Q2 FY26 following a strong 52% expansion in Q1. Aggregate State capex (top 19) also increased by
3.5% in Q2, after registering 31% growth in Q1. Typically, capex allocations translate into higher construction activity with a lag.
Construction • Bitumen consumption and finished steel consumption rose by 27% and 8.8%, respectively, in Q2 FY26—higher than the 4% contraction in
bitumen and the 7.9% growth in steel recorded earlier.
• IIP infrastructure and construction goods rose by 11.5% in Q2, higher than 6% in Q1.

3
Economic scenario in Q2 FY26 (2/2)

Areas showing Mixed Trends

• Toll collections grew by 21.8% in Q2 FY26, up from 19.7% in Q1.

• E-way bill issuances increased by 23.1% in Q2, compared with 20.5% in Q1.
• Non-food credit growth strengthened to 13.3% in Q2 from 10.4% in Q1.
• Life insurance first-year premiums rose by 10.7% in Q2, higher than the 4.3% growth recorded in Q1.
• Diesel consumption increased by 3.3% in Q2, compared with 2.6% in Q1.
Services Sector
• Domestic air passenger traffic declined by 1.9% in Q2, following 5.3% growth in Q1.
• Services exports grew by 8.7% in Q2, moderating from 10.1% in Q1.
• Central Government revenue expenditure contracted by 14.6% in Q2, compared with a 20% expansion in Q1.
• State revenue expenditure growth also moderated to 7.4% in Q2 from 11.3% in Q1.
• Port cargo traffic and domestic air cargo traffic grew by 5.2% and 4.9%, respectively, in Q2—down from 5.9% and 6.6% in Q1.

Areas showing Broad Weakness

• IIP mining remained in a contractionary zone, falling 0.5% YoY in Q2 FY26 after contracting by 3% in Q1.
Mining and Quarrying • Coal Production also contracted by 1.3% in Q2 after remaining flat in Q1.
• Prolonged monsoon could have impacted mining activities.

Utilities • Electricity generation remained flat in Q2 after contracting by 5.5% in Q1.

4
Select High Frequency Indicators

Sector High- Frequency Indicators Unit Q2 FY25 Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26
Fertilizer Sales* YoY -7.3 0.4 -9.6 -14.7 19.4
Domestic Tractor Sales YoY 0.7 13.5 23.4 9.2 30.7
Agriculture Agricultural Credit YoY 17.4 14.4 11.3 7.8 8.0
Agri Export YoY 1.6 20.4 10.9 8.6 17.3
Govt. expenditure on Agri and Allied Sectors YoY -21.2 2.7 2.5 11.8 18.7
Infrastructure Industries: Steel Production YoY 4.3 7.8 6.8 7.2 14.7
Infrastructure Industries: Cement Production YoY 3.2 8.7 12.4 8.0 7.4
Pig and Sponge Iron Production YoY 8.4 9.6 8.0 9.9 7.6
Gross GST Collections: Domestic YoY 8.0 9.5 9.7 9.7 7.7
Manufacturing
IIP Manufacturing YoY 3.3 4.5 4.2 3.3 4.9
Passenger Vehicle Production YoY -0.5 3.3 6.4 4.9 3.8
Two-Wheeler Production YoY 12.5 8.0 5.8 0.7 10.6
Non POL Non Agri Exports YoY 5.2 13.1 6.9 8.4 12.8
Central Government Capex YoY 10.3 47.7 33.4 52.0 30.7
State Capex** YoY -1.1 8.4 20.5 31.1 3.5
Construction Finished Steel Consumption YoY 12.1 7.5 11.9 7.9 8.8
Bitumen Consumption YoY -26.6 0.2 -3.8 -4.0 27.0
IIP: Infra and Construction Goods YoY 3.9 7.0 8.1 6.0 11.5
IIP Mining YoY -0.1 1.8 2.4 -3.0 -0.5
Mining and Quarrying
Coal Production YoY 0.4 6.7 2.5 0.0 -1.3
Electricity Generation YoY 0.4 2.5 2.0 -5.5 0.3
Utilities
Electricity Demand YoY -0.7 2.6 3.2 -1.5 3.3
Domestic Air Passenger Traffic YoY 7.3 11.4 12.0 5.3 -1.9
Toll Collection YoY 10.3 12.7 17.2 19.7 21.8
Petrol Consumption YoY 7.3 9.7 5.8 7.1 6.4
Trade, Hotels, Transport, ATF Consumption YoY 9.4 8.8 6.5 3.9 -2.0
Communication and Services Diesel Consumption YoY 0.1 4.8 1.2 2.6 3.3
Related to Broadcasting E-way Bill Collections YoY 16.8 16.9 19.4 20.5 23.1
Domestic Air Cargo Traffic YoY 7.7 4.6 3.1 6.6 4.9
International Air Cargo Traffic YoY 21.8 15.0 1.3 4.7 3.6
Port Cargo Traffic YoY 4.8 3.0 3.7 5.9 5.2
Services Export YoY 12.2 17.9 14.2 10.1 8.7
Non-Food Credit YoY 14.8 12.3 12.2 10.4 13.3
Financial, Real Estate and Industrial Credit YoY 9.7 7.8 7.8 7.8 7.8
Professional Services Retail Credit YoY 16.8 15.7 14.1 14.3 20.1
Life Insurance: First Year Premium YoY 16.5 -6.6 -4.3 4.3 10.7
Non Life: Gross Direct Premium YoY 1.8 9.4 1.7 8.8 5.8
Central Government Revex YoY 6.0 13.1 -5.1 20.0 -14.6
Public Admin.
State Government Revex YoY 10.0 17.4 7.1 11.3 7.4
5
Source: CEIC, CMIE, CareEdge. *August-Sept data is used to calculate Q2 growth. ** Data pertaining to top 19 states
Contact

Rajani Sinha Chief Economist [Link]@[Link] +91 - 22 - 6754 3525

Sarbartho Mukherjee Senior Economist [Link]@[Link] +91 - 22 - 6754 3483

Mradul Mishra Media Relations [Link]@[Link] +91 - 22 - 6754 3596

CARE Ratings Limited

Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022
Tel. : +91-22-6754 3456 l CIN: L67190MH1993PLC071691

Connect:

Locations: Ahmedabad l Andheri-Mumbai l Bengaluru l Chennai l Coimbatore l Hyderabad l Kolkata l Noida l Pune

About us:

CareEdge is a knowledge-based analytical group offering services in Credit Ratings, Analytics, Consulting and Sustainability. Established in 1993, the parent company CARE
Ratings Ltd (CareEdge Ratings) is India’s second-largest rating agency, with a credible track record of rating companies across diverse sectors and strong position across the
segments. The wholly-owned subsidiaries of CareEdge Ratings are (I) CARE Analytics & Advisory Private Ltd, (II) CARE ESG Ratings Ltd, and (III) CareEdge Global IFSC Ltd.
CareEdge Ratings’ other international subsidiary entities include CARE Ratings (Africa) Private Ltd in Mauritius, CARE Ratings South Africa (Pty) Ltd, and CARE Ratings Nepal
Ltd. For more information: [Link].

Disclaimer:

This report is prepared by CARE Ratings Limited (CareEdge Ratings). CareEdge Ratings has taken utmost care to ensure accuracy and objectivity while developing this report
based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CareEdge Ratings is not
responsible for any errors or omissions in analysis / inferences / views or for results obtained from the use of information contained in this report and especially states that
CareEdge Ratings has no financial liability whatsoever to the user of this report.

For more information: [Link]

Privacy Policy applies. For Privacy Policy please refer to [Link]

© 2025, CARE Ratings Limited. All Rights Reserved.

This content is being published for the purpose of dissemination of information. Any use or reference to the contents herein on an “as-is” basis is permitted with due
acknowledgement to CARE Ratings. Reproduction or retransmission in whole or in part is prohibited except with prior written consent from CARE Ratings