New Delhi is buzzing with optimism as the latest SBI Research report forecasts India’s GDP growth to exceed 8 percent in the third quarter of fiscal year 2025-26. Despite persistent global challenges, the domestic economy has demonstrated remarkable resilience, maintaining a robust growth trajectory.
High-frequency economic indicators paint a promising picture for the October-December 2025 period. Rural consumption remains a powerhouse, bolstered by positive signals from both agricultural and non-agricultural sectors. Urban demand is also picking up steam, fueled by fiscal stimulus and a vibrant festival season that has spilled over into sustained spending.
Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at State Bank of India, highlighted these trends, noting, ‘The rural economy is firing on all cylinders, while urban consumption shows consistent improvement post the festive period.’ This domestic strength is expected to drive overall GDP growth to 7.4 percent for FY26, with household demand as the primary engine.
Adding to the positive narrative, India is set to overhaul its GDP base year from 2011-12 to 2022-23, with new data series slated for release on February 27. This methodological upgrade, alongside updating the Consumer Price Index base to 2024, aims to better capture the evolving economic landscape, including the surge in digital commerce and services.
The revised framework will incorporate informal sector data more accurately and leverage new sources like GST records, e-vehicle registrations, and natural gas consumption metrics. Analysts suggest this could propel India firmly into the ranks of the world’s fourth-largest economy.
While the full extent of revisions remains uncertain due to significant methodological shifts, the second advance estimates for FY26 GDP, alongside revised figures for the past three years and quarterly data under the new base, will be unveiled soon. This comes as the latest Economic Survey projects potential GDP growth around 7 percent, with FY27 estimates ranging from 6.8 to 7.2 percent.
Contrast this with a global economy mired in uncertainty, where growth is projected at a modest 3.3 percent for 2025-26. Geopolitical tensions, high debt levels, and structural transitions like digitalization and decarbonization are creating uneven growth patterns worldwide. India’s ability to buck this trend underscores its economic fortitude and policy effectiveness.