Economy Eyes Upswing
New Delhi
India’s economy is expected to grow between 6.8 and 7 percent in the first quarter of FY26, driven by strong discretionary spending, according to a report by SBI Research released on Thursday. Gross Value Added (GVA) growth for April–June is projected at 6.5 percent, with the gap between real and nominal growth narrowing.
The report highlighted the crucial role of private investment in sustaining growth. While government capital expenditure continues to support expansion—its elasticity to GDP touching 1.17—muted private capex remains a concern. SBI Research warned that new US tariffs could further slow private investments, making it necessary for them to complement public spending to ensure long-term growth.
On the global front, the International Monetary Fund (IMF) has raised its growth forecast for 2025 to 3 percent and for 2026 to 3.1 percent, citing pre-emptive activity ahead of tariff implementations. India’s projection was revised upwards by 20 basis points to 6.4 percent, while China’s was raised by 80 basis points to 4.8 percent.
The report noted that corporate India, covering around 4,300 listed companies, registered 4.7 percent sales growth and 6.7 percent EBIDTA growth in the first quarter, compared with 11 percent EBIDTA growth in the previous quarter. With fresh tariffs on Indian exports coming into effect, earnings outlook for the next two quarters appears weak.
