New Delhi: India’s economy is projected to maintain strong momentum in the final quarter of the 2025-26 financial year, with real GDP growth estimated at nearly 7.2 per cent, according to a latest report by the State Bank of India.
The report highlighted that resilient domestic demand, improving rural consumption and continued urban spending have helped the Indian economy remain stable despite rising geopolitical tensions and global economic uncertainties.
According to the SBI assessment, the country’s full-year GDP growth for FY26 is expected to reach around 7.5 per cent, reinforcing India’s position as one of the fastest-growing major economies globally. However, the report also cautioned that the outlook for FY27 may witness moderate easing due to external risks linked to international conflicts and supply chain disruptions.
The report stated that high-frequency indicators showed a slight moderation during the fourth quarter, but overall economic activity remained healthy. Rural demand continued to strengthen due to improved agricultural performance and non-farm sector expansion, while urban consumption remained steady after the festive season, aided by government fiscal support measures.
SBI economists projected nominal GDP growth for the fourth quarter of FY26 at nearly 12.2 per cent. For the 2026-27 fiscal year, nominal GDP growth is estimated at approximately 11 per cent, with a GDP deflator of around 4.5 per cent.
The banking report further noted that India’s real GDP growth for FY27 is currently projected at 6.6 per cent. Analysts attributed the expected moderation primarily to geopolitical instability across several regions, including ongoing tensions in the Middle East that continue to affect global trade and commodity supply chains.
The report added that future growth projections could be revised depending on evolving international conditions and fresh economic data in the coming months.
Meanwhile, the International Monetary Fund recently lowered its global growth forecast for 2026 to 3.1 per cent due to concerns over supply disruptions and weaker international trade activity. Despite the slowdown in the global economy, the IMF slightly upgraded India’s growth outlook for FY27 to 6.5 per cent, citing strong domestic demand and stable economic fundamentals.
The SBI report also pointed to inflation related risks emerging from fluctuations in crude oil and commodity prices, along with the possibility of El Nino weather conditions affecting food production. However, strong rabi crop output has improved near-term food supply prospects, offering some relief on the inflation front.
The report noted that the Reserve Bank of India is expected to continue actively managing liquidity conditions to support economic stability and maintain balanced growth.
Economists believe India’s domestic consumption-driven growth model has provided an important buffer against global volatility. Continued investment in infrastructure, government welfare spending and stable consumer demand are expected to remain key pillars supporting economic expansion over the next fiscal year.
While global uncertainty remains a concern, analysts said India’s macroeconomic fundamentals continue to show resilience, positioning the country favourably compared to several advanced and emerging economies facing slower growth trends.