SBI Research projects India’s Q1 FY27 GDP growth at 8%, above the RBI’s 7% estimate, supported by strong consumption, broad-based economic activity and government capital expenditure.
Key Highlights:
- SBI Research estimates Q1 FY27 GDP growth at 8%.
- The projection is higher than the RBI’s 7% estimate.
- 86% of 54 high-frequency indicators accelerated in Q1 FY27.
- Government capital expenditure remained supportive during the quarter.
- Scheduled commercial bank credit growth accelerated to 17.7%.
- SBI expects FY27 credit growth at 16–17%.
- Improved monsoon conditions could support growth momentum.
- SBI cautioned against further rupee depreciation for financial stability.
New Delhi, August 11: India’s GDP growth in the first quarter of FY27 is estimated at 8%, according to an SBI Research report. The projection is higher than the Reserve Bank of India’s 7% growth estimate.
SBI Research said strong consumption and demand indicators continue to show resilience, while industrial activity remains broadly satisfactory. The services sector, which is the largest contributor to economic growth, is also showing positive momentum across several indicators.
The bank’s nowcasting model tracks 54 high-frequency indicators covering agriculture, industry and services. Around 86% of these indicators showed acceleration during Q1 FY27, compared with 69% in the same quarter of the previous financial year, indicating broad-based economic momentum.
Government capital expenditure also remained supportive. Capex spending by 20 states stood at 10.5% of their Budget Estimates during Q1 FY27, compared with 10.9% in Q1 FY26.
Credit growth has also strengthened. Scheduled commercial bank credit growth accelerated to 17.7%, while deposit growth stood at 12.7% for the fortnight ended July 15, 2026. SBI Research expects aggregate deposit growth of 14.5–15% and credit growth of 16–17% during FY27.
Improving monsoon conditions could provide additional support to economic activity. The rainfall deficit, which was close to 40% in June, narrowed to around 12% after surplus rainfall in July and normal rainfall in August.
SBI Research also noted that the Indian Ocean Dipole could partly offset the impact of El Niño. July economic data and the progress of the monsoon indicate that the growth momentum could continue into the second quarter.
However, the report cautioned about the depreciation of the Indian rupee. The currency had breached the ₹96 level against the US dollar before recovering and stabilising around ₹95–95.5. SBI economists said further depreciation needs to be contained due to financial stability concerns and called for stronger policy signalling from the RBI.
