THEBUSINESSBYTES BUREAU

NEW DELHI, FEBRUARY 25, 2026

India’s economic momentum appears to be strengthening, with real GDP growth in the October–December quarter of FY26 projected to edge past the 8 per cent mark, signalling robust activity across consumption and credit markets even as methodological revisions loom.

A research report by the State Bank of India’s Economic Research Department estimates third-quarter growth at around 8.1 per cent under the revised national accounts series with 2022–23 as the new base year. The upbeat outlook follows an already strong first half of the fiscal, during which the economy expanded by 8 per cent, reinforcing India’s position as one of the fastest-growing major economies.

The National Statistics Office’s first advance estimates had pegged full-year FY26 growth at 7.4 per cent, an improvement over 6.5 per cent in the previous fiscal. The second advance estimates due on February 27 are expected to incorporate fresh data and recalibrate earlier quarterly numbers, making the trajectory of revisions difficult to predict in the wake of significant methodological changes.

High-frequency indicators point to resilient economic activity in the third quarter, with rural demand buoyed by favourable farm and non-farm performance while urban consumption has gathered pace since the festive season, aided by fiscal support measures. This broad-based consumption recovery has emerged as a key pillar of growth at a time when global uncertainties persist.

On the financial side, banking trends show credit growth continuing to outpace deposit mobilisation. Reserve Bank of India data indicates aggregate deposits rising by 12.5 per cent compared with credit growth of 14.6 per cent, pushing up the credit-deposit ratio. The report notes that such divergences are not unusual in India’s banking cycle, though sustained gaps warrant monitoring for liquidity management.

With domestic demand holding firm and policy support cushioning consumption, the economy appears well positioned to sustain high growth into the closing months of FY26, even as statisticians prepare to redraw the contours of national output under the new base year framework.