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India's Q3 GDP Growth Projected at 8.1% on Strong Domestic Demand

India's economy is expected to grow by around 8.1% in the third quarter of FY26, according to an SBI report, highlighting resilience despite global challenges. The growth is fueled by robust domestic demand, with strong rural consumption and steady improvement in urban spending. The report comes ahead of the release of second advance GDP estimates and a major revision of the GDP base year to 2022-23 on February 27, 2026. Concurrent updates to the Consumer Price Index base year aim to provide a more accurate measure of inflation.

Key Points: India Q3 GDP Growth Forecast 8.1% by SBI Report

  • Q3 FY26 GDP growth forecast at 8.1%
  • Strong rural and urban consumption driving growth
  • FY26 GDP projected at 7.4% per advance estimates
  • GDP base year revision to 2022-23 due Feb 27
  • CPI base year also updated to 2024
3 min read

India's GDP growth likely at 8.1% in Q3 FY26 amid strong domestic demand: SBI report

SBI report projects India's Q3 FY26 GDP growth at 8.1%, driven by resilient domestic demand and consumption. New GDP base year revision due.

"we expect Q3FY26 real GDP growth of closer to 8.1 per cent - SBI Report"

New Delhi, February 24

India's economy is expected to maintain strong growth momentum, with GDP projected to expand by around 8.1 per cent in the third quarter of the current financial year, according to a report by the State Bank of India.

The report highlighted that despite global headwinds, the Indian economy has remained resilient, supported by strong domestic demand and steady economic activity across sectors.

It stated "we expect Q3FY26 real GDP growth of closer to 8.1 per cent".

According to the report, high-frequency economic indicators suggest resilient economic activity during the third quarter of FY26. Rural consumption has remained strong, supported by positive signals from both farm and non-farm activities.

At the same time, urban consumption has shown a steady improvement, supported by fiscal stimulus and increased spending since the last festive season.

As per the first advance estimates, India's GDP is projected to grow at 7.4 per cent in FY26, with growth largely driven by domestic demand.

The report emphasised that domestic consumption continues to play a key role in supporting economic expansion despite uncertainties in the global economic environment.

The report also noted that the second advance estimates of GDP for FY26 are scheduled to be released on February 27, 2026. These estimates will incorporate additional data and revisions, and previous quarterly GDP figures for the first and second quarters are expected to change due to the revision in the base year.

India has updated its GDP base year from 2011-12 to 2022-23, with the new series scheduled for release on February 27, 2026. The report stated that, given the significant methodological changes, it is difficult to predict the direction of revisions in the GDP data.

The base year revision is aimed at better reflecting the current structure of the Indian economy, including changes such as the growing role of digital commerce and the services sector.

In addition, India has also updated the base year for the Consumer Price Index (CPI) to 2024, which will help provide a more accurate measure of inflation based on current consumption patterns.

Recently, Reserve Bank of India (RBI) Governor Sanjay Malhotra also said that the revision of the inflation targeting range following the CPI base year update is under examination and will be considered in the next policy.

"The revised framework would be taken into account in the RBI's next set of projections to be released during the April monetary policy," he said.

The report highlighted that strong domestic demand, resilient consumption trends, and ongoing economic activity continue to support India's growth outlook, even as global economic challenges persist.

- ANI

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Reader Comments

R
Rohit P
Good numbers, but I hope this growth is reaching everyone. In my city, the cost of living is still very high. The GDP figure is one thing, but we need to see real improvement in jobs and wages for the middle class.
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Aman W
Updating the GDP base year is a smart move. Our economy has changed so much since 2011-12 with UPI, digital payments, and startups. The new data will give a much clearer picture. Excited for the official release on the 27th!
S
Sarah B
As someone working in the services sector, I can feel this momentum. Client demand has been strong, and there's a definite optimism in the business environment. The report's emphasis on domestic demand being the driver is spot on.
K
Karthik V
Strong rural consumption is the heart of this story. When farmers have a good season and money flows in villages, it creates a ripple effect across the economy. Hope the monsoon is kind this year too to keep this going.
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Nikhil C
While the headline number is great, the article mentions it's difficult to predict revisions due to methodological changes. Let's wait for the final data on the 27th before celebrating too much. Accuracy is important.

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