The SBI Ecowrap report suggests that the projected 7.4% GDP growth rate for FY26 is reasonable but expects the actual figure to be around 7.5%. The report anticipates a positive bias towards growth, with the second advance estimates set for release on February 27, 2026, likely to show revisions based on additional data.
On the expenditure front, government consumption saw a 5.2% real growth, while exports maintained a 6.4% positive growth. Private consumption, slightly lower at 7%, may be attributed to a slowdown in the agriculture sector. Notably, per capita consumption expenditure increased by 6.1%, supported by government consumption and service sector traction in FY26.
Capital formation, which rebounded in FY26 after a slowdown, exhibited a real growth of 7.8%, indicating a revival in investment demand. The nominal growth in capital formation also showed an uptick, reflecting positive investment sentiments, as highlighted in the SBI report.
Imports recorded a nominal growth of 9% but a real growth of 14.4%, which is expected to ease in FY27 due to energy price projections. The fiscal deficit as of November 25 stood at Rs 9.8 lakh crore, constituting 62.3% of the budget estimate. Despite lower tax revenue projections for FY26, higher non-tax revenue is expected to balance overall receipts, leading to a fiscal deficit of Rs 15.85 lakh crore, slightly higher than the budgeted amount. With the revised GDP figures, the fiscal deficit as a percentage of GDP is likely to remain stable at 4.4%.
