India’s real GDP to hit 7.2 pc in Q4FY26 amid resilient domestic demand: SBI report

NEW DELHI: India’s real GDP growth is expected to reach nearly 7.2 per cent in the final quarter of the 2025-26 fiscal year, highlighting the sustained momentum of the domestic economy despite a challenging global environment.

According to a report by SBI, the full-year growth for FY26 is likely to settle at 7.5 per cent, even as the outlook for the following year remains subject to geopolitical shifts. “Overall, we expect Q4FY26 real GDP growth of closer to 7.2 per cent and nowcasted full year 2026-27 GDP growth rate of 6.6 per cent. FY26 GDP growth is likely to be at 7.5 per cent,” the SBI report stated.

The report noted that while high-frequency data showed a minor decline in the fourth quarter, overall economic activity remained resilient. Strength in rural consumption, supported by both farm and non-farm sectors, continues to provide a solid foundation for growth. Simultaneously, urban consumption maintained a steady upward trajectory since the previous festive season, bolstered by fiscal stimulus.

On the nominal front, the projections remained high. The report estimated that the nominal GDP growth for the fourth quarter of FY26 will hover around 12.2 per cent. For the 2026-27 fiscal year, the nominal GDP is estimated at approximately 11 per cent, factoring in a deflator of around 4.5 per cent. “We expect that the nominal GDP growth will be around 12.2 per cent for Q4FY26. Our real GDP is projected at 7.2 per cent for Q4FY26,” the report added.

Looking ahead to FY27, the report expects the growth trajectory to moderate slightly, with a real GDP growth of 6.6 per cent for the next fiscal year, primarily due to the ongoing economic implications of global geopolitical disturbances.

“The Real GDP growth for FY27 is projected to be 6.6 per cent taking into account economic implications of recent geopolitical disturbances. Given the geopolitical uncertainties, FY27 numbers will be revised as more data comes in,” the report noted.

The SBI report mentioned that the International Monetary Fund (IMF) recently lowered its world growth forecast to 3.1 per cent for 2026, citing supply chain disruptions caused by conflicts in the Middle East. However, “Contrary to the global trend, the IMF slightly increased India’s growth projection to 6.5 per cent for 2026-27, driven by strong domestic demand,” the report observed.

“Volatility in crude oil and other commodity prices along-with possible El Nino conditions impart considerable volatility to inflation. However, the near-term food supply prospects have been boosted by robust rabi crop providing some comfort. RBI has also indicated that it will be actively intervening for managing liquidity,” the report stated. (ANI)