Economy likely grew between 7-7.5% in April-June, SBI research expects 8%

The Indian economy is likely to have grown between 7 and 7.5 per cent during the April-June quarter (Q1) of Fiscal Year 2026-27, various research reports indicated. SBI research is an outlier, expecting the growth rate to touch 8 per cent.

The Ministry of Statistics and Programme Implementation (MoSPI) will formally release the data on Monday, August 31. The growth rate during the January-March quarter (Q4) of Fiscal Year 2025-26 was 7.8 per cent, while it was 6.8 per cent in the April-June quarter (Q1) of FY26. Q1 of FY27 is the first full quarter after war began in West Asia.

Barclays estimated the growth rate at 7.5 per cent. High frequency activity indicators (HFIs) for April-June saw better growth rates vs the January-March quarter. “Out of the 20 HFIs we track, only seven saw y-o-y average growth rates slow in Q1FY27 vs Q4FY26,” said Aastha Gudwani, India Chief Economist at Barclays. Of these seven, indicators such as petrol, diesel, LPG demand and fertiliser production were anticipated to see slower growth, reeling under the stress of the West Asia conflict. Steel production growth slowed, two-wheeler production slowed too but remained quite robust.

According to Prabhakar, apart from better industrial performance, steady improvement in government capex along with healthy credit and deposit growth will push growth higher. “Going ahead for FY27, growth is projected at 6.6-6.8 per cent, as more clarity emerges on account of conflict resolution in West Asia as well as the final outcome of kharif harvest,” she said.

Meanwhile, SBI’s economic research report has expected growth to be higher on both sequential and y-o-y basis. “Our Q1FY27 GDP growth estimate stands at 8 per cent,” Soumya Kanti Ghosh, Group Chief Economic Adviser of SBI, wrote in the report. He explained that the underlying momentum remains broad-based. “We track more than fifty leading indicators across consumption and demand, agriculture, industry, services and other sectors, with 86 per cent showing acceleration in Q1 FY27, compared with 69 per cent in Q1 FY26,” he said.

Further, consumption and demand remain resilient. “High-frequency demand indicators continue to support growth outlook, while industrial activity remains broadly satisfactory barring a few pockets while services provide further support, other indicators also corroborate our 8 per cent growth estimate,” he said.