Indian economy poised to remain fastest-growing one in FY26 — SBI report
Published on May 31, 2025
By IANS
- NEW DELHI — The Indian economy is poised to remain the fastest-growing major
economy in FY26 by leveraging its sound macroeconomic fundamentals, robust
financial sector and commitment towards sustainable growth, according to a
State Bank of India (SBI) report.
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- With higher anticipated saving based on latest RBI annual
report, the domestic finances will be sufficient to finance the anticipated
growth and “we do not expect demand induced pressure on prices in FY26,” said
Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.
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- The downside to growth emanate from external and
geopolitical factors, Ghosh added.
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- From the expenditure side, the GDP growth of 7.4 per cent
in Q4 was supported by strong uptick in the capital formation which registered
a 9.4 per cent annual growth.
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- The recovery in capital formation was on account of
revival in core sector in Q4 as evident from high frequency indicators. The
overall growth in capital formation for FY25 now stands 7.1 per cent.
-
- India’s economy grew by 7.4 per cent in Q4 FY25 as
against 8.4 per cent growth in same quarter last fiscal. Riding on Q4 numbers,
the annual FY25 growth is estimated at 6.5 per cent.
-
- Almost all sectors exhibited better growth numbers in Q4
FY25. While industry grew by 6.5 per cent, the services sector grew by 7.3 per
cent in Q4. Within industry during Q4, construction sector grew by whopping
10.8 per cent (6-quarters high) and manufacturing sector increased by 4.8 per
cent.
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- The private consumption maintained its health run in Q4
although there was sequential slow rate of growth in Q4. Overall, the private
consumption registered a growth of 7.2 per cent for FY25.
-
- The export demand was healthy for whole year, registering
a growth of 6.3 per cent, while the imports contracted for the whole year by
3.7 per cent.
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- According to the SBI report, this growth was front-loaded
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.
