The Indian economy is expected to grow by 7.4 per cent in the current fiscal, maintaining its status as the world’s fastest-growing major economy despite punitive US tariffs and geopolitical tensions.
The First Advance Estimates released by the Ministry of Statistics and Programme Implementation indicate a GDP growth rate in 2025-26 of better than 7.3 per cent, which is higher than the RBI‘s and the government’s initial projections of 6.3-6.8 per cent. The economy had grown at 6.5 per cent in the previous fiscal.
Leading economists said that the numbers of close to street expectations. They argue that, given these growth numbers, the government will be able to meet its fiscal target of 4.4 per cent and how the Reserve Bank will respond through interest rate adjustments.
Here are the views of some leading economists on the GDP growth estimates
GDP growth likely to be at 7.5%: SBI
Commenting on the GDP estimates, the State Bank of India said that historically, the difference between RBI’s estimate and NSO’s estimate is always in the range of 20-30 bps and hence the 7.4% estimate of FY26 is quite expected and reasonable.
“We, however, believe that GDP growth for FY26 would be around 7.5% with upward bias. The second advance estimates, incorporating additional data and revisions, are scheduled to be released on February 27, 2026. So, all these numbers are expected to change with the base revision to 2022-23.” SBI elaborated in a statement.
Expenditure to remain within deficit target: DBS Bank
Radhika Rao, Executive Director and Senior Economist at DBS Bank, stated that although the nominal GDP growth of sub-9% is weaker than the budgeted 10.1%, the number is closer to the RE numbers for FY25. In effect, the stronger-than-expected nominal GDP base in FY25 reduces the risk that FY26 deficit targets will be missed solely because of slower growth.
“That said, expenditure compression is likely in FY26 to keep within the deficit target. Into FY27, higher deflators will bode well for the nominal growth rate. We also note that the second advance estimate in late February will garner more interest as it will be based on the new series and carry backdated numbers as well. Changes in the incorporated series will adopt updated methodologies, offer better granularity, and capture the shift in sectoral weightage in the past decade.” Rao elaborated.
Rate cut unlikely: Care Edge
Rajani Sinha, Chief Economist, CareEdge said that with favourable factors like GST rationalisation, lower income tax burden, low inflation, cut in interest rates and strong rural demand, the growth momentum was expected to be healthy. “However, we need to be wary of the heightened global uncertainties and trade barriers imposed by the US and the impact of that on our exports and capital flows.” Sinha cautioned.
“With GDP growth remaining healthy, we feel that the MPC is unlikely to cut rate further in the next meeting. Given the turbulent global landscape, we expect the MPC to pause and preserve the policy space for a future rate cut only if the growth outlook deteriorates.”Sinha added.
released on February 27, 2026. So, all these numbers are expected to change with the base revision to 2022-23.” SBI elaborated in a statement.