POLL: India April-June GDP growth seen around 7.4%, SBI most bullish at 8%

India's economy appears to have carried strong domestic momentum into the first quarter of 2026-27, with a 91bps poll of seven institutions forecasting real GDP growth of around 7.4% in April-June. The estimates suggest that the economy absorbed the immediate impact of the West Asia conflict, higher commodity prices and uneven weather conditions better than initially expected, although the underlying sectoral picture remains uneven.

Forecasts range from 7.0% to 8.0%, with SBI at the upper end of the estimates, while Bank of Baroda and ICRA are the most cautious.

 

The estimate, if realised, would mark a moderation from the 7.8% growth recorded in the preceding January-March quarter, but would remain above the Reserve Bank of India's April-June projection of 7.0%.

The common theme across the forecasts is that domestic demand remained sufficiently strong to offset external disruptions during the quarter. Manufacturing, financial activity and broader services appear to have provided the main support, while government infrastructure spending continued to underpin investment.

SBI's estimate of around 8% reflects its assessment of broad-based acceleration in activity. It said 86% of more than 50 leading indicators tracked by it showed acceleration in April-June, compared with 69% a year earlier. Consumption and demand remained resilient, industrial activity was broadly satisfactory and services added further support.

The fiscal impulse also remained significant. Central capital expenditure rose 23.7% year-on-year during the quarter, with spending reaching 27.8% of the full-year budget estimate against 24.5% a year earlier. This suggests public infrastructure spending continued to provide an important cushion to investment at a time when external conditions were volatile.

Barclays' 7.5% forecast similarly points to limited economic spillover from the West Asia conflict. Only seven of the 20 high-frequency indicators tracked by the bank showed slower year-on-year growth in April-June than in the preceding quarter. It described the conflict's economic impact as "sharp, but short-lived", suggesting the shock remained concentrated in directly affected sectors rather than becoming a broader drag on activity.

HDFC Bank also expects 7.5% growth, arguing that first-quarter momentum "seems to have held up". Its assessment suggests that concerns over a significant hit from the conflict and uneven monsoon conditions have eased, although these risks have not disappeared.

The sectoral composition, however, indicates that growth was not equally distributed. CareEdge expects manufacturing growth to accelerate sharply to 9.9% from 7.3% in the preceding quarter, supported by stronger IIP manufacturing growth, automobile production and sales, and GST collections. It expects overall GDP growth of 7.3%, but sees momentum moderating later in the year as external shocks filter through the economy.

Agriculture remains the principal area of uncertainty. Estimates range from 2.9% by CareEdge to 4.0% by ICRA, reflecting differing assessments of the impact of delayed monsoon rains, heatwaves and El Niño conditions. Bank of Baroda expects agricultural growth of 3.5%.

Services are expected to remain another major growth driver, with CareEdge projecting 8.0% growth and HDFC Bank 8.4%. Financial activity, credit growth and services exports should remain supportive, though trade, hotels and transport could face some moderation.

Overall, the poll suggests that the first-quarter data may reinforce the view of an economy with strong domestic buffers against external shocks. The key question for the remainder of 2026-27 is whether this resilience can be sustained once the effects of higher energy prices, supply-chain disruptions and weather-related risks become more visible.