India’s Q1 FY26 real GDP grew at 6.9% YoY, initial SBI estimates show

Initial estimates by the State Bank of India (SBI) show the country’s real gross domestic product (GDP) grew at 6.9 per cent year on year (YoY) in the first quarter (Q1) of fiscal 2025-26 (FY26).

Peak elasticity of government capital expenditure-to-GDP at 1.17 indicates private investment must complement public investment to take the economy onto an even higher sustainable growth path, a recent report by the SBI research department noted.

Initial SBI estimates show India’s real GDP grew at 6.9 per cent YoY in Q1 FY26.
Peak elasticity of government capital expenditure-to-GDP at 1.17 indicates private investment must complement public investment to take the economy onto an even higher sustainable growth path, an SBI report noted.
The sectoral credit growth for June 2025 indicates credit growth declined across sectors, except SMEs.

Private investors need to hold the baton now, going ‘glo-cally’ competitive as apostles of growth 2.0 world over, it said.

The gap between real and nominal GDP in India, which was as large as 12 percentage points in Q1 FY23, dropped sharply to 3.4 percentage points in Q4 FY25, said the report.

The credit growth of scheduled commercial banks (SCBs) slowed to 10 per cent as on July 25, 2025, compared to last year’s growth of 13.7 per cent.

On the other hand, aggregate deposits grew by 10.2 per cent YoY, compared to last year’s growth of 10.65 per cent YoY.

The sectoral credit growth for June 2025 indicates credit growth declined across sectors, except small and medium enterprises (SMEs). SME credit increased YoY by 21.8 per cent compared to last year’s growth of 14.2 per cent.

However, excluding bank credit, resource flow to commercial sector has expanded at 15.6 per cent in Q1 FY26. Credit growth to the MSME sector was at 21.8 per cent during the same period.

Fibre2Fashion News Desk (DS)

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