Kolkata: With the government about to set rolling a new GDP series later this month, the estimate of Q3 growth is rising to the headlines. SBI Research has pencilled in a Q3 GDP growth could stand at 8.1% but has admitted that it is difficult to estimate what the growth will come to with the government set to roll out the new set of GDP series on Feb 27, advancing the base year from 2011-12 to 2022-23 to reflect the changing nature of the modern economy.
8.1% growth possible
“Overall, we expect Q3FY26 real GDP growth of closer to 8.1%. Given significant methodological changes, it is difficult to predict the direction of revision,” stated SBI Research in its report.
The think tank and research agency of the biggest bank in the country highlighted that high-frequency activity data “indicates resilient economic activity in 3QFY26. Rural consumption remains strong, driven by positive signals from farm and non-farm activity.” It also mentioned that triggered by fiscal stimulus in the form of a GST rejig, urban consumption has displayed consistent rise since the festive season of last year.
Q1, Q2 numbers expected to change
SBI Research has also said that the strong growth momentum comes even as global headwinds continue to trouble the external sector. “As per the first advance estimate, GDP is estimated to growth at 7.4% in FY26, with growth largely driven by domestic demand. As per the latest Economic Survey, India’s potential GDP is estimated to be around 7% and estimated to grow in the range of 6.8-7.2% during FY27,” it said.
Incidentally, all the previous quarterly numbers of Q1 and Q2 are expected to change with the base revision to 2022-23 which will be unveiled on Feb 27. “We track 50 leading indicators in consumption and demand, Agri, Industry, service and other indicators, which indicate significant jump in Q3 FY26 growth (as compared to Q4 FY25),” the report stated.
ICRA forecast slowdown
Only recently rating major ICRA predicted that the GDP growth is expected to decelerate to 7.2% in the Dec quarter of the current financial year with slower expansion by the services and agriculture sector accounting for the overall slowdown.
Aditi Nayar, chief economist, head-research & outreach, ICRA was quoted as saying, “An estimation of GDP growth as per the new base year is challenging at present. We have anchored the outlook for Q3 to the existing GDP dataset across the sectors of the economy, based on which we project the GDP growth to have eased to 7.2% in Q3 2025-26 from 8.0% in the first half of the fiscal…. “The reasons for the estimated sequential slowdown include an unfavourable base effect, contraction in Government capital spending, subdued state government revenue expenditure, and weak merchandise exports. Nevertheless, healthy demand during the festive season, boosted by GST rationalisation, likely kept the pace of growth above 7% in the said quarter.”