India’s economic momentum is expected to remain strong, with GDP growth likely to reach around 8.1 percent in the third quarter of the current financial year (FY26), according to a report released by the State Bank of India (SBI). The country’s largest lender said that despite global economic challenges, India continues to show resilience, driven mainly by strong domestic demand and steady activity across key sectors.
As per the report, real GDP growth in Q3FY26 is projected to stay close to 8.1 percent. High-frequency indicators suggest robust economic performance during the quarter, reflecting sustained momentum in both rural and urban markets.
Why GDP Growth May Stay Strong
The report highlights that rural consumption remained healthy during Q3, supported by encouraging trends in agricultural as well as non-agricultural activities. Urban consumption also showed improvement, aided by fiscal support measures and higher spending following the festive season. SBI noted that domestic consumption continues to be the backbone of India’s growth story, helping cushion the impact of global uncertainties.
Based on the first advance estimates, India’s GDP growth for the full FY26 is projected at around 7.4 percent, largely led by internal demand rather than external factors.
Key Data Expected on February 27
SBI’s report also pointed out that the second advance estimates of GDP for FY26 will be released on February 27, 2026. These estimates will include additional data revisions and reflect changes due to the revision of the GDP base year. India has updated its base year from 2011–12 to 2022–23, with the new GDP series also scheduled for release on the same date.
The report cautioned that due to significant methodological changes, predicting the exact impact on past GDP figures—especially for the first and second quarters—remains difficult. However, the revised base year is expected to offer a more accurate picture of the modern Indian economy, factoring in developments such as digital commerce and the expanding services sector.
Inflation Calculation Framework Also Revised
Alongside GDP revisions, India has updated the base year for the Consumer Price Index (CPI) to 2024. This change aims to better reflect current consumption patterns and provide more precise inflation estimates. Recently, Reserve Bank of India Governor Sanjay Malhotra stated that the central bank is reviewing possible adjustments to the inflation targeting framework following the CPI base year revision. He added that the updated framework would be incorporated into the RBI’s projections during the April monetary policy review.
Overall, the SBI report emphasized that strong domestic demand, improving consumption trends, and consistent economic activity are expected to keep India’s growth outlook robust, even as global economic headwinds continue.
