SBI Sees Over 8% Growth In Q3 On Strong High-Frequency Indicators

New Delhi, Feb 24 (KNN) India’s economy is likely to have grown at over 8 percent in the third quarter ending December 31, according to a research report by the State Bank of India (SBI), citing resilient high-frequency indicators.

The Ministry of Statistics is scheduled to release official GDP data on Friday based on a revised base year of 2022–23, replacing the earlier 2011–12 base.

High-Frequency Data Signals Strong Momentum

According to SBI, high-frequency indicators suggest robust economic activity during the quarter. It included strong rural consumption, supported by both farm and non-farm activity. 

Urban consumption showed a sustained uptick since the festive season, aided by fiscal stimulus. Out of 50 leading indicators tracked across consumption, agriculture, industry and services, 87 per cent showed acceleration in Q3, up from 80 per cent in Q2.

“GDP growth as per SBI composite leading indicator (CLI) based on monthly data shows an upward momentum,” the report said. However, SBI cautioned that methodological changes due to the new base year make it difficult to predict the direction of revisions in official estimates.

Divergence from Other Forecasts

SBI’s projection is notably higher than other estimates. ICRA has pegged Q3 growth at 7.2 percent, down from 8.2 percent in the July–September quarter. In December, the Reserve Bank of India Monetary Policy Committee projected Q3 growth at 7 percent.

Earlier, first advance estimates placed FY26 growth at 7.4 percent, while the Economic Survey estimated potential growth at around 7 percent and projected FY27 growth between 6.8 and 7.2 percent.

The second advance estimates for FY26, along with revised quarterly data and back-series data for the past three years under the new base year, will be released on Friday.

Banking Sector Performance: PSBs Outpace Private Banks

The SBI report also highlighted stronger performance by public sector banks (PSBs) compared to major private lenders during the nine-month period ending December 31, 2025.

For the fortnight ended January 31, aggregate deposits grew by 12.5 percent from 10.3 percent last year. Credit growth stood at 14.6 percent from 11.4 percent last year.

With credit growth outpacing deposit growth, the credit-deposit (CD) ratio has risen. However, SBI noted that such gaps are not unusual in the banking system.

Profit Performance

Net profit of 12 public sector banks rose 12.5 percent to Rs 1.46 lakh crore during the nine-month period. Net profit of eight major private sector banks grew around 3 percent to over Rs 1.30 lakh crore in the same period.

The report suggests that PSBs have outperformed major private lenders in profitability growth during FY26 so far, even as overall banking system liquidity dynamics remain closely watched.

With official GDP numbers due shortly, SBI’s upbeat forecast sets the stage for a potential upside surprise in third-quarter growth data.

(KNN Bureau)