SBIFM Forecasts Nominal GDP Rise Over 12% and Gradual RBI Rate Hike

The research team at SBI Funds Management projects that India’s nominal GDP could exceed a 12 percent annual increase during the upcoming quarters, driven by strong capital spending and export performance. This robust nominal growth is expected even as the country grapples with stubborn inflation and high global commodity prices.

The note also highlights the likelihood of a measured tightening by the Reserve Bank of India. Over FY 2026‑27, the central bank may raise its policy repo rate by about 50 basis points, moving from a neutral stance toward a more restrictive posture. Should inflation remain elevated, real interest rates could also see a gradual rise.

These expectations are set against a backdrop where the first quarter of FY 2026‑27 recorded a real GDP growth of 7.8 percent, with investment and export contributions outpacing consumption. The report suggests that the economy’s resilience will depend on sustaining the investment cycle and maintaining export competitiveness.

Analysts caution that any major external shock could derail these forecasts, emphasizing the importance of a stable global economic environment for India’s growth story.