New Delhi [India], September 1 (ANI): SBI Research has revised upwards its real GDP growth forecast for India for FY27 to 7.3 per cent from its earlier estimate of 6.6 per cent, citing stronger-than-expected Q1 growth, resilient domestic demand and improving high-frequency indicators.

The revision comes after India's real GDP grew 7.8 per cent in Q1 FY27, compared with 6.9 per cent in the corresponding quarter of FY26. SBI Research said the strong performance was broad-based, with services emerging as the best-performing sector and manufacturing also recording robust growth.

'We now revise our FY27 growth forecast to 7.3% from earlier 6.6%.' the SBI Ecowrap said.

The report projected real GDP growth at 7.3 per cent in Q2, 7.2 per cent in Q3 and 6.9 per cent in Q4 of FY27. It said the growth momentum would be supported by accelerating industrial production, services activity, credit demand and investment spending, along with resilient consumption.

'The gradual moderation reflects normalization from Q1's strong 7.8% base rather than a loss of underlying momentum, with domestic demand remaining the key growth anchor.' the report said.

The report noted that the economy's supply-side strength remained robust, with Gross Value Added (GVA) growing 8.2 per cent in Q1 FY27, compared with 7.0 per cent a year ago.

Services sector growth stood at 10 per cent in Q1 FY27, led by a 12.1 per cent expansion in financial, real estate and professional services and 8.5 per cent growth in trade, hotels, transport, communication and related services.

The industry sector grew 7.7 per cent, despite a 2.4 per cent contraction in mining and quarrying, while manufacturing growth accelerated to 9.2 per cent from 8.3 per cent in Q1 FY26. Agriculture grew 3.6 per cent during the quarter.

On the expenditure side, SBI Research said demand conditions remained robust, with private consumption growing 7.1 per cent and capital formation doubling to 11.9 per cent in Q1 FY27. Exports also surged 12 per cent during the quarter.

'Momentum is supported by accelerating high-frequency indicators, including industrial production, services activity, credit demand and investment spending, alongside resilient consumption.' the report said.

SBI Research, however, cautioned that the interpretation of Q1 FY27 GDP data requires careful assessment in view of the impact of policy measures introduced amid the West Asia conflict. It said changes in imports, gold-related restrictions and energy-price transmission could have influenced the real GDP estimates.

The report also highlighted improving bank credit growth, noting that scheduled commercial banks' credit grew 18.3 per cent for the fortnight ended August 15, 2026, compared with 10.2 per cent a year earlier. It expects aggregate deposit growth of 14.5-15 per cent and credit growth of 15-16 per cent in FY27.

SBI Research said the strong Q1 performance and improving demand indicators warranted a significant upward revision to its FY27 growth outlook, while the moderation expected through the remaining quarters reflects normalization from a high base rather than a weakening of the economy's underlying momentum. (ANI)