The SBI Funds Management (SBIFM) Research expects nominal GDP growth to accelerate to above 12 per cent in the coming quarters. It also warned that persistent inflation and elevated global commodity prices could keep interest rates higher for longer. It said that FY27 growth estimates would likely need to move above 7 per cent if there is no fresh global shock. The report also said a stronger growth path could allow real rates in India to adjust higher if inflation stays sticky.
SBIFM Research based its outlook on real GDP growth of 7.8 per cent year-on-year in Q1 FY27, with investment and exports emerging as the main drivers rather than consumption. The report said real gross fixed capital formation and exports grew around 12 per cent each, compared with 7.1 per cent growth in consumption.
India’s FY27 growth estimates may need to move above 7 per cent if no fresh global shock occurs, SBIFM Research said.
Investment and exports, rather than consumption, are expected to carry more of the expansion, relevant for manufacturers and sourcing teams.
Sticky inflation and commodity costs could keep rates higher, with possible RBI tightening.
Corporate capital expenditure is also expected to strengthen, according to the report. Capex by BSE 500 companies is projected to rise 11 per cent in FY27 after ₹10.4 trillion (~$110 billion) of capex in FY26.
For business segments, SBIFM Research said exports, manufacturing, capital goods and other business-oriented areas appear relatively more attractive, while consumption-oriented sectors require greater selectivity. The assessment is relevant for textile and apparel supply chains tracking export demand, factory investment and manufacturing-linked spending.
On risks, SBIFM Research said Brent crude could remain elevated over the next six months as China rebuilds reserves, European gas storage stays inadequate and US crude inventories decline. The report said this backdrop could keep global rates higher for longer.
For India, SBIFM Research said the Reserve Bank of India could eventually move from its current neutral stance towards tightening. The report said around 50 basis points of cumulative rate hikes in FY27 are plausible, though the timing and scale would depend on incoming data.
Fibre2Fashion News Desk (KD)
