Telangana Poised for 12–13% Annual Growth, Could Become USD 1 Trillion Economy by 2034: Brickwork Ratings
Telangana is on a strong growth trajectory and is projected to achieve an average real GDP growth of 12–13 per cent annually between 2025 and 2034, potentially transforming into a USD 1 trillion economy by 2034, according to a report by Brickwork Ratings, a leading home-grown credit rating agency.
Hyderabad
Telangana is on a strong growth trajectory and is projected to achieve an average real GDP growth of 12–13 per cent annually between 2025 and 2034, potentially transforming into a USD 1 trillion economy by 2034, according to a report by Brickwork Ratings, a leading home-grown credit rating agency.
The robust outlook is driven by sustained momentum in the state’s industrial base, a dominant services sector, and large-scale infrastructure investments. Brickwork Ratings noted that continued policy support, steady capital inflows, and structural reforms will be crucial to sustaining this growth while mitigating domestic and global risks.
In FY2025, Telangana recorded a real GDP growth of 8.1 per cent, significantly higher than the national average of 6.5 per cent. The state has also emerged as one of the lowest inflation states in the country during the first seven months of FY26, with average inflation at just 0.01 per cent compared to the national average of 1.91 per cent. This was attributed to declining food prices, GST rate cuts, and strong supply-side conditions.
Telangana also leads the country in per-capita income, which stood at ₹3.8 lakh in FY25, underscoring the state’s rising prosperity.
Commenting on the outlook for 2026, Manu Sehgal, CEO of Brickwork Ratings, said Telangana enters the year with a strong and resilient growth outlook supported by sustained government-led capital expenditure across infrastructure, IT, and pharmaceuticals. He highlighted that the services sector, contributing nearly two-thirds of the state’s Gross State Value Added (GSVA), continues to be the backbone of economic growth.
Sehgal added that proactive governance, business-friendly policies, ease of doing business reforms, and growing global investor confidence have enhanced Telangana’s investment appeal. The availability of a skilled and young workforce, along with a favourable financial environment marked by lower borrowing costs, positions the state well for sustained and inclusive growth.
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On the broader credit outlook, Brickwork Ratings noted that India witnessed an improvement in credit ratings during the first half of FY26, with upgrades outpacing downgrades. The infrastructure sector showed the strongest momentum, while export-dependent sectors faced headwinds.
Explaining the infrastructure optimism, K.H. Patnaik, Chief Rating Officer, Brickwork Ratings, said infrastructure projects tend to become highly cash-generative once construction is completed. He also pointed to the growing use of Infrastructure Investment Trusts (InvITs), which have reduced the cost of capital for road, power, and transmission projects by 200–250 basis points. Strong balance sheets of both banks and corporates have further strengthened the sector.
However, export-oriented sectors have shown weakness due to delays in the India–US trade deal. Patnaik noted that progress in trade agreements with European nations and countries like Russia could help boost exports and narrow trade deficits.
Brickwork Ratings identified sustained government infrastructure spending, robust domestic demand, and healthy corporate balance sheets as key drivers of credit rating upgrades. Conversely, US tariffs, global demand slowdown, and elevated commodity costs were cited as reasons for downgrades.
Rajeev Sharan, Head of Criteria, Model Development, and Research at Brickwork Ratings, said India’s economic momentum is expected to continue, supported by resilient GDP growth, improved liquidity conditions, and the RBI’s recent rate cut. However, he cautioned that geopolitical uncertainties remain a key downside risk that could impact trade flows and financial markets.
Brickwork Ratings, established in 2007, is registered with SEBI and recognised by the RBI as an External Credit Assessment Agency. It provides comprehensive credit rating and research services across sectors and has Canara Bank as its promoter and strategic partner.
