India's Q1 FY27 GDP growth likely to near 8 pc amid broad-based momentum: Report
New Delhi, Aug 11
India's first quarter FY27 gross domestic product growth is estimated at about 8 per cent, with underlying momentum broad‑based, a report said on Tuesday.
The report from SBI Research said 86 per cent of 50 leading indicators tracked by the bank across consumption and demand, agriculture, industry, services and other sectors showed acceleration in Q1 FY27 compared with 69 per cent in Q1 FY26.
The report added that consumption and demand remain resilient, services continue to support growth and industrial activity is broadly satisfactory apart from a few pockets.
"Services sector, the largest contributor to economic growth, revealed that except freight and passenger traffic all are in favour of an impressive growth for Q1," the bank said.
Government capital expenditure remained supportive as capex spending by 20 states was 10.5 per cent of budget estimates in Q1 FY27 versus 10.9 per cent in Q1 FY26, growing 5.5 per cent YoY.
The Central capex rose to 27.8 per cent of budget estimates from 24.5 per cent, registering 23.7 per cent growth.
Scheduled commercial banks' credit growth accelerated to 17.7 per cent and deposits to 12.7 per cent for the fortnight ended July 15, 2026, the report said, adding that since Q2 FY26, credit continues to grow till now.
The projected FY27 aggregate deposit growth is estimated at 14.5-15 per cent and credit growth at 16-17 per cent. The quarterly results from selected banks indicate improvement in efficiency indicators across the banks.
Monsoon conditions have improved as nearly 40 per cent rainfall deficit in June was partly offset by surplus rainfall in July and normal rains in August, bringing the overall deficit down to around 12 per cent.
"Data of July high frequency indicators and monsoon progress suggest continued growth momentum. Thus, we believe that going forward growth is likely to be robust," the research firm said.
— IANS
Reader Comments
The credit growth of 17.7% is remarkable! But I wonder if this is sustainable. Banks need to be careful about asset quality. Also, let's not forget that this GDP number needs to translate into actual job creation. That's what matters for the common person.
Good to see government capex picking up in central and state budgets. Infrastructure spending is the key multiplier for growth. With monsoon improving, agriculture should also contribute better in the coming quarters. Let's hope this momentum continues!
Interesting analysis from SBI Research. The 40% rainfall deficit in June being offset by July is particularly encouraging. However, we should watch how the services sector performs since it's the largest contributor. Global slowdown could still impact IT and other export services.
While the numbers look promising, I'm a bit concerned about the deposit growth at 12.7% vs credit growth at 17.7%. This gap suggests banks might face liquidity pressure. But overall, it's reassuring to see steady progress. Yeh India hai, hum manage kar lenge! 💪
These projections are great but ground reality often differs. As a small business owner, I'm still waiting for easier credit access and faster clearances. GDP stats are good for headlines, but let's hope the benefits reach every tier of society.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.