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India to be fastest-growing big economy with 6.3-6.5% FY26 growth: SBI

03 Jun '25
2 min read
India to be fastest-growing big economy with 6.3-6.5% FY26 growth: SBI
Pic: Shutterstock

Insights

  • SBI believes India is poised to be the fastest-growing major economy in FY26, with a 6.3-6.5-per cent GDP growth due to sound macroeconomic fundamentals, robust financial sector and commitment to sustainable growth, SBI said in its newsletter.
  • With higher anticipated saving, domestic finances will be enough to finance such growth and SBI does not expect demand-induced pressure on prices in FY26.
The State Bank of India (SBI) believes India is poised to remain the fastest-growing major economy in fiscal 2025-26 (FY26), with gross domestic product (GDP) growth expected at 6.3-6.5 per cent.

This will be possible because of the country’s sound macroeconomic fundamentals, robust financial sector and commitment to sustainable growth, SBI said in its latest issue of ECOWRAP newsletter.

With higher anticipated saving, domestic finances will be sufficient to finance the anticipated growth and the bank does not expect demand-induced pressure on prices in FY26. The downside to growth emanate from external and geopolitical factors, it noted.

India’s economy grew by 7.4 per cent in the fourth quarter (Q4) of FY25 compared to 8.4-per cent growth seen in Q4 FY24, according to provisional estimates by the National Statistics Office.

The gross value added (GVA) grew by 6.8 per cent in Q4 FY25 and by 6.4 per cent in the full fiscal. Core GVA grew by 6.4 per cent in FY25.

Nominal GDP grew by 9.8 per cent in FY25 compared to 12-per cent growth in FY24.

From the production side, all sectors exhibited better growth numbers in Q4 FY25; the industry grew by 6.5 per cent in the quarter.

Export demand was healthy for whole fiscal, registering a growth of 6.3 per cent, while imports contracted by 3.7 per cent. This growth was frontloaded because of export push amidst US tariffs uncertainty.

The highest contraction in imports happened in Q4 at 12.7 per cent was another factor in pulling the overall GDP growth to 7.2 per cent in Q4 FY25, the newsletter observed.

ALCHEMPro News Desk (DS)

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