Private Consumption Decelerates in Q4, Fiscal Year 2026 Growth Revised Upward to 7.7%

India's Private Consumption Growth Slows Down in Q4

India's Private Final Consumption Expenditure (PFCE) growth slowed down to 7.1 percent in the fourth quarter of 2025-26, marking a decline from 8.2 percent in the third quarter of the same fiscal year. According to the Ministry of Statistics and Programme Implementation (MoSPI), PFCE growth on a year-on-year basis rose to 7.1 percent in Q4 of 2025-26 from 5.6 percent in the same quarter of the previous fiscal year.

On a fiscal year basis, private consumption grew by 7.7 percent in 2025-26, an increase from 5.8 percent in the previous fiscal year. PFCE is a crucial indicator used to measure the spending incurred by households, providing valuable insights into the country's consumption patterns.

In contrast, Government Final Consumption Expenditure (GFCE) grew marginally to 4.9 percent in the fourth quarter of 2025-26 from 4.6 percent in the previous quarter. Gross Fixed Capital Formation (GFCF) also rose to 10.8 percent in the fourth quarter from 8.2 percent sequentially. However, GFCE in 2025-26 slowed down to 5.5 percent from 6.5 percent on a year-on-year basis, while GFCF soared to 8.2 percent from 6.4 percent in the previous fiscal year.

Read also: Consumer Spending Resilient in India's 7.7% GDP Growth, Despite Rising Oil and Monsoon Risks

The Indian economy grew at a rate of 7.7 percent in 2025-26, surpassing the 7.6 percent projection in the second advance estimates. The real GDP growth in 2025 was 7.1 percent. Looking ahead, the Reserve Bank of India (RBI) has projected a growth rate of 6.6 percent for the fiscal year 2026-27, a decline of 110 basis points from the previous year.