Fiscal Deficit Target Met, But Slow GDP Growth Pressures Debt Metrics

• Centre likely to meet its 4.4% fiscal deficit target for FY26.
• Nominal GDP growth slows to 8%, below Union Budget's 10.1% projection.
• Slower nominal GDP growth puts pressure on debt-to-GDP ratio, complicating fiscal consolidation plans.
• Real GDP expected to grow at 7.4% in FY26, driven by services and manufacturing sectors.
• Government faces a balancing act; analysts await Union Budget for strategy adjustments.

Why It Matters: Meeting deficit target is short-term relief, but slower GDP growth threatens long-term fiscal health.