In the first quarter of FY26, the share of private final consumption expenditure (PFCE) in nominal GDP increased to 60.3% from 58.3%, highlighting a rise in consumption contribution.

Factors like income-tax relief, a 100 basis point cut in the repo rate, healthy kharif sowing, and upcoming GST slab rationalization are expected to support private consumption, although household discretionary spending may slow until festival-related tax cuts.

Private sector capital goods output grew by 9.8% in Q1, indicating sustained momentum in private investment.

Rural real-wage growth in agriculture remained positive for four consecutive quarters, contributing to ongoing consumption growth.

The rise in imports suggests higher spending by upper-income groups, supported by a 7.4% increase in real-wage growth in the formal sector during Q1, the highest in eight quarters.

Government capital expenditure surged by 33.3% in Q1FY26, reflecting frontloading by central and state governments, which helped boost overall investment demand.

Gross fixed capital formation (GFCF), a key indicator of investment demand, grew by 7.8% in Q1FY26, though its share in GDP declined slightly to 30.4% from 31%.

India’s private final consumption expenditure grew by 7% in April-June 2025, indicating a recovery in consumption demand and broader economic participation.

Government final consumption expenditure increased by 7.4% in Q1 after a contraction in the previous quarter, though its share in GDP declined to 10.1% from 11.1%, reflecting increased government spending.

Sales volumes of fast-moving consumer goods rose to 6% in Q1FY26 from 5% in Q4FY25, with rural areas continuing to outpace urban regions for six consecutive quarters.