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Informist, Monday, May 11, 2026

 

NEW DELHI – The Indian economy is likely to have grown 7.2% in the March quarter, in line with the Reserve Bank of India's projection, according to an estimate given by economists at State Bank of India. Meanwhile, Fitch Group company BMI pegs India's GDP growth in Jan-Mar at 8%.

 

At 8%, BMI's projection for the March quarter growth is an upward revision from 7.8?rlier. "This revision was due to recently released data indicating domestic demand surged during the quarter," economists at BMI said in a research note. "The uptick in domestic demand is unsurprising in light of India's recent economic performance. Price inflation remained low throughout 2025 (averaging 2.2%)," they said.

 

Economists at SBI estimate India's GDP to grow 6.6% in 2026–27 (Apr-Mar), whereas BMI projects it 10 basis points higher. The estimates are lower than the central bank's forecast of 6.9% GDP growth in FY27. "India continues to demonstrate resilience with GDP likely to grow in the range of around 6.6%, despite global uncertainties and regional conflicts," economists at SBI said, with the scenario of oil price averaging around $100 per barrel. Currently, crude oil is trading at $103.53 per barrel.

 

Economists at BMI, while maintaining their FY27 growth forecast at 6.7%, said, "...our belief that the effects of last year's tax reforms will fade as input costs increase in the new fiscal year." The FY27 growth expectation by economists is in line with the government's projection of 6.8-7.2% estimated in the Economic Survey for FY26. The Indian economy grew 7.6% in FY26.

 

Further, economists at SBI see considerable volatility in inflation due to risks arising from the war in West Asia such as a hike in energy and other commodity prices along with possible El Nio conditions. "However, the near-term food supply prospects have been boosted by a robust rabi crop providing some comfort," they said. "RBI has also indicated that it will be actively intervening in managing liquidity."

 

RBI Governor Sanjay Malhotra had said the central bank would ensure sufficient liquidity is available to meet the productive requirements of the economy, indicating continued support for credit flow and financial stability. The RBI has projected India's headline inflation at 4.6% and core inflation at 4.4% in FY27. "Headline inflation remains contained and below the target, but upside risks to the inflation outlook have increased, driven by increased energy price pressures and probable weather disturbances affecting food prices," Malhotra had said.

Economists at BMI said, "Specifically, consumption and investment could grow more quickly in FY2026/27 than we currently forecast." They expect GST receipts figures of April and May to provide "an important clue as to whether the tax reform's effects have truly waned."

However, the prospect of the war in West Asia escalating in scope presents a downside risk to the outlook. SBI's model estimates that every $10 per barrel rise in crude oil prices may widen India's inflation by 35–40 bps and lower GDP growth by 20–25 bps. However, BMI's models indicate GDP growth will fall 1.0-1.5 percentage points in case crude oil prices rise to around $110 per barrel. "The size of this impact makes India's economy amongst the most sensitive to changes in energy prices within Asia," economists at BMI said.  End

 

US$1 = INR 95.31

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Shweta

Edited by Avishek Dutta

 

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