NEW DELHI, Aug 22: The Indian economy may have registered a strong growth rate of 6.7 percent which is slightly higher than the estimate of 6.5 percent for Quarter1, According to a report by State Bank of India (SBI).
The report noted that its analysis results show GDP growth at 6.9 per cent during the quarter, with Gross Value Added (GVA) estimated at 6.5 per cent. Based on this model, SBI obtained a now cast of real GDP growth at 6.9 per cent year-on-year for the reference quarter.
It stated “Initial estimates showcase Q1 FY26 GDP could be at approx. 6.8 per cent-7.0 per cent.” The report statistically highlighted growth pattern of previous quarter, and also forecasted factor dynamics providing persistence and smooth adjustment. This anchors the current projection within the medium-run growth path suggested by the model.
The report also discussed the narrowing gap between real and nominal GDP growth. In Q1 FY23, the gap was as large as 12 percentage points, but it fell sharply to 3.4 percentage points in Q4 FY25. For Q1 FY26, the report suggested that this gap will narrow further, as inflation remains historically low. With the GDP deflator expected to reduce, the difference between real and nominal GDP growth is likely to shrink.
According to SBI, this narrowing of the gap could mask the current deceleration in growth momentum. As a result, nominal GDP could drop to 8 per cent in Q1 FY26, even though real GDP growth remains robust in the range of 6.8 per cent-7.0 per cent.
(Subham Singh)
