An SBI report projects India's GDP to grow by 8.1% in Q3 FY26, driven by resilient domestic demand. The report estimates 7.4% growth for the full year and notes upcoming GDP and CPI base year revisions impacting economic data.
India's economy is expected to maintain strong growth momentum, with GDP projected to expand by around 8.1 per cent in the third quarter of the current financial year (FY26), according to a report by the State Bank of India (SBI).
The report highlighted that despite global headwinds, the Indian economy has remained resilient, supported by strong domestic demand and steady economic activity across sectors. It stated "we expect Q3FY26 real GDP growth of closer to 8.1 per cent".
Strong Domestic Demand Fuels Growth
According to the report, high-frequency economic indicators suggest resilient economic activity during the third quarter of FY26. Rural consumption has remained strong, supported by positive signals from both farm and non-farm activities. At the same time, urban consumption has shown a steady improvement, supported by fiscal stimulus and increased spending since the last festive season.
As per the first advance estimates, India's GDP is projected to grow at 7.4 per cent in FY26, with growth largely driven by domestic demand. The report emphasised that domestic consumption continues to play a key role in supporting economic expansion despite uncertainties in the global economic environment.
Key Economic Data Revisions Announced
The report also noted that the second advance estimates of GDP for FY26 are scheduled to be released on February 27, 2026. These estimates will incorporate additional data and revisions, and previous quarterly GDP figures for the first and second quarters are expected to change due to the revision in the base year.
India has updated its GDP base year from 2011-12 to 2022-23, with the new series scheduled for release on February 27, 2026. The report stated that, given the significant methodological changes, it is difficult to predict the direction of revisions in the GDP data. The base year revision is aimed at better reflecting the current structure of the Indian economy, including changes such as the growing role of digital commerce and the services sector.
CPI Base Year Also Updated
In addition, India has also updated the base year for the Consumer Price Index (CPI) to 2024, which will help provide a more accurate measure of inflation based on current consumption patterns.
Recently, Reserve Bank of India (RBI) Governor Sanjay Malhotra also said that the revision of the inflation targeting range following the CPI base year update is under examination and will be considered in the next policy. "The revised framework would be taken into account in the RBI's next set of projections to be released during the April monetary policy," he said.
The report highlighted that strong domestic demand, resilient consumption trends, and ongoing economic activity continue to support India's growth outlook, even as global economic challenges persist.
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)