New Delhi: The Indian economy is likely to have expanded 8.0-8.1% in the December quarter as high-frequency indicators suggest resilient economic activity, marked by strong rural consumption and consistent uptick in urban consumption, State Bank of India (SBI) said on Tuesday.
Despite global headwinds, the Indian economy has maintained strong growth momentum, SBI said in a research report, adding that the economy is expected to grow at 7.7-7.8% in the full fiscal year, faster than the 7.4% projected in the first advance estimate released by the statistics ministry on 7 January.
However, given the significant methodological changes expected in GDP computation when the government releases the second advance estimate for FY26 with 2022-23 as the new base year, it is difficult to predict the direction of revision in numbers. The current GDP series has 2011-12 as the base year.
India’s economy had expanded 7.8% and 8.2% in the June and September quarters. Along with the new GDP series, the ministry of statistics will also release revised GDP estimates for the past three financial years and quarterly estimates.
New data sources like GST data for quarterly national accounts, use of public financial management system (PFMS) data for timely and updated estimates in the case of government sector and use of e-vahan data in production and consumption of land transport services are features of the new method of GDP estimation, SBI said.
The central government uses PFMS for tracking, managing and monitoring the flow of public funds.
Global economy is impacted by a high degree of uncertainty, with growth projected at 3.3% both in 2025 and 2026, but remains uneven elsewhere due to geopolitical tensions, high debt, and structural shifts like digitalisation and decarbonization, SBI said.
On 20 February, the US Supreme Court invalidated the Trump administration’s use of tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977. However, the executive quickly invoked the 1974 Trade Act to impose a new 10% global tariff on all imports to the US for 150 days, now revised to the maximum limit of 15%. This temporary measure starts from 24 February and ends in July unless Congress does not ratify the imposition, SBI said.
Earlier this month, the RBI said private consumption and fixed investment supported India’s growth amid global headwinds, but net external demand remained a drag, with imports outpacing exports. Going forward, economic activity is expected to hold up well in FY27, according to the central bank.
In the next financial year, real GDP growth in the June and September quarters is expected at 6.9% and 7%, respectively, according to the RBI.