SBI Research sees Q1 FY27 GDP growth at 8%, points to broad-based momentum
Aug 11, 2026
New Delhi [India], August 11 : SBI Research expects India's real GDP growth to rise to 8 per cent in the first quarter of financial year (FY)27, above the Reserve Bank of India's 7 per cent projection, with a broad set of economic indicators pointing to stronger momentum across consumption, industry and services.
The research report said 86 per cent of the 50 leading indicators it tracks showed acceleration in Q1 FY27, compared with 69 per cent in the same quarter a year ago. SBI Research said its nowcasting model, which uses 54 high-frequency indicators across agriculture, industry and services, also supports the 8 per cent growth estimate.
The report said consumption and demand remained resilient during the April-June quarter. Domestic passenger vehicle sales grew 24.1 per cent year-on-year in June, while electric vehicle registrations rose 55.3 per cent. Electricity demand increased 11.5 per cent and consumer credit grew 15.8 per cent during the month.
Industrial activity was also described as broadly satisfactory, barring a few pockets. General Index of Industrial Production (IIP) growth accelerated to 7.3 per cent in June, while corporate industry credit growth rose to 19.2 per cent. Cement output grew 9.8 per cent and electricity generation increased 9.8 per cent during the month.
The services sector provided further support, with services exports growing 13.3 per cent in June and cargo traffic at all airports rising 22.3 per cent. Bank credit growth also accelerated to 18.6 per cent, according to the report.
Government capital spending remained supportive of activity. Central government capex stood at 27.8 per cent of budget estimates in Q1 FY27, up from 24.5 per cent a year earlier, registering 23.7 per cent growth. Spending by 20 states was at 10.5 per cent of their budget estimates and grew 5.5 per cent year-on-year.
SBI Research also said improved monsoon conditions could support the growth outlook. A nearly 40 per cent rainfall deficit in June was partly offset by surplus rainfall in July and normal rains in August, bringing the overall deficit down to around 12 per cent.
Looking ahead, the report said July high-frequency data and monsoon progress suggest that the growth momentum is likely to continue, with "going forward growth is likely to be robust." It estimated FY27 aggregate deposit growth at 14.5-15 per cent and credit growth at 16-17 per cent based on current trends.
