What to expect from tomorrow's Second Advance Estimates of GDP. Let learn more!

What to watch out for in tomorrow’s Second Advance Estimates of GDP. The government will announce the “Second Advance Estimates of National Income” tomorrow (28 February). Simply put, this is the latest government estimate of India’s economic output (that is, GDP, or gross domestic product) for the current fiscal year. The First Advance Estimates (FAE) published earlier in January must be compared with the Second Advance Estimates (SAE). What are “advance” GDP estimates?

The current fiscal year ends on March 31, but it is not yet over. A forecast (an “advance estimate”) of the state of the economy at the end of the current fiscal year is therefore more accurate than any estimate of GDP (that is, India’s total economic output).

The SAE also includes information on economic growth in the third quarter of the fiscal year (October to December) which is not included in the FAE which only uses the first two quarters' performance (April to June and July to September).Another important fact is that SAEs are published together with comprehensive growth forecasts for Q3.

In addition to the SAE, the government (Ministry of Statistics and Programme Implementation, or MoSPI) publishes a series of revisions called the “First Revised Estimates” (FRE) of national income for the previous fiscal year.

Given all the background revisions, it is not surprising that the SAE are more precise forecasts of the state of the economy in the future.

However, it is important to note that the SAE is not the last word on these revisions. The next set of revisions, the Provisional Estimates (PE) of GDP, will be published in May. The PE will then be revised to FRE in February 2026.

What should be watched out for in GDP advance estimates?

Why the SAE should be published at all is, of course, open to question, given that it will no doubt be revised upwards when the provisional estimates are published in May.

The Second Advance Estimates are better guesses of the state of the economy going forward. What to look for in tomorrow’s Second Advance Estimates of GDP. But it’s important to remember that the story of these revisions does not include nominal GDP and its rate of growth.

The market value of all goods and services produced in India in the current financial year is called nominal GDP. It takes into account inflation (or the rise in prices) every year, so it is not “real” GDP.

During her presentation of the Interim Union Budget in February last year, Finance Minister Nirmala Sitharaman had put in a nominal GDP of Rs 328 lakh crore (trillion) for this fiscal. She had put in a nominal GDP of Rs 326 lakh crore in her presentation of the Union Budget after the July Lok Sabha elections. In a January 2025 report, the FAE had estimated the nominal GDP.

Higher prices are also captured by the difference between the nominal and real growth rates of GDP. As the TABLE shows, that difference was not as large as the amount of inflation faced by many consumers. Many observers were therefore amazed, and the reliability of GDP figures came into question.

Many were surprised by the drop in the GDP growth rate in the second quarter and its magnitude—the GDP grew by only 5. 4% in the second quarter of the current fiscal year—and some interpreted it as a short-term glitch in India’s otherwise smart economic recovery post-pandemic.