(Reuters) -India's economy unexpectedly expanded 7.8% year-on-year in the April-June quarter, picking up from 7.4% in the previous three months, data released on Friday showed.
Economists polled by Reuters had forecast growth likely cooled to 6.7% in the quarter and said it would continue to slow as a sharp hike in U.S. tariffs threatens Indian exporters and jobs.
MADHAVI ARORA, LEAD ECONOMIST, EMKAY GLOBAL, MUMBAI
"The super healthy GDP growth print in the first quarter has gotten a temporary boost
from extremely soft deflator, front-loaded government spending (unlike last year), along with front-loaded exports to the US. Some of these factors will reverse as we move ahead.
"Besides, the effective macro hit from the 50% tariff imposition will start to feed through exports and have a domino effect on employment, wages and private consumption. This could further dampen private investment outlook and hinder growth,
"However, on the face of it, softer deflator effect and some consumption buffer from GST cuts could offset the hit in real GDP growth as we move to calendar year 2026."
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
"The sharply higher-than-expected first-quarter GDP data provides a reasonable upside to our earlier full-year estimate of 6.2%.
"However, we remain fairly cautious on the way ahead amid expected slowdown in exports from higher tariffs along with deferring in production ahead of GST rate cuts.
"We expect some policy interventions to help offset the adverse impact of the tariff impact on exporters."
(Reporting by Nikunj Ohri and Manvi Pant; Compiled by Dhanya Skariachan; Editing by Janane Venkatraman)
