India is likely to record real GDP growth of 6.5-7 per cent in the current fiscal and nominal growth of roughly 11-12 per cent, with corporate earnings growth accelerating to about 17 per cent in the year beginning April 2027, the global brokerage Jefferies has projected.
Momentum driven by credit, consumption and services
Jefferies highlighted several domestic demand and financial indicators as evidence of underlying resilience, saying the economy has held up despite geopolitical tensions and higher energy costs. Bank credit expansion was cited as a particularly important signal: credit grew 19.1 per cent year-on-year at end‑August, while corporate lending was up 21.6 per cent in July.
Loans to small and medium enterprises — a barometer for broad-based activity — rose 24.9 per cent, supported by deposit growth of 17.8 per cent in August, the brokerage noted. Jefferies interprets the pickup in SME credit as an early sign that recent policy measures on goods and services tax and labour, and ongoing efforts to improve ease of doing business, are beginning to feed through to real economic activity.
- Bank credit: +19.1% (y-o-y, end-August)
- Corporate lending: +21.6% (July)
- MSME loans: +24.9% (y-o-y)
- Deposit growth: +17.8% (August)
Recovery signs across consumption and real estate
Domestic demand indicators also strengthened. Goods and Services Tax collections rose 14.8 per cent year-on-year in August, pointing to robust consumption and formal-sector activity. Power demand accelerated to 9.4 per cent in April–August from 1.8 per cent in the January–March quarter, signalling stronger industrial and residential electricity use.
Residential real estate also showed improvement: sales in the top seven cities climbed about 7 per cent in the first seven months of 2026, reversing a 1 per cent decline in calendar 2025, Jefferies reported. The brokerage sees these trends as consistent with a gradual revival of private-sector capex, supported by rising corporate borrowing.
| Indicator | Latest reported |
|---|---|
| Real GDP (this fiscal) | 6.5–7% |
| Nominal GDP (this fiscal) | 11–12% |
| Corporate earnings (next fiscal) | ~17% (from ~14%) |
| Brent crude | ~USD 106/barrel (at time of report) |
Risks: energy and geopolitics
The brokerage warned that India’s outlook remains exposed to developments in the Middle East, chiefly via energy prices. At the time of the report Brent crude was trading near USD 106 a barrel, and disruptions around key shipping routes were exerting upward pressure on oil markets, creating an upside risk to India’s import bill and inflation.
Despite that, Jefferies judged that structural drivers of India’s growth story remain intact, with formal credit flows, GST collections and improving real-estate activity offering a base for stronger earnings and investment over the coming year.
What it means for you
For households and businesses, the forecast implies a continuation of steady job and income growth in several sectors, especially where credit flows and consumer demand are rising. Faster SME lending could mean better access to working capital for small firms, while higher nominal growth typically supports corporate revenue expansion and tax receipts.
Policymakers and investors will be watching oil prices and geopolitical developments closely; a sustained spike in energy costs could pressure inflation and interest-rate dynamics. For savers, the report is not an investment recommendation, but the indicators suggest an economy moving from recovery into a more durable expansion phase — with unevenness across sectors that calls for selective attention.
Jefferies’ appraisal frames a cautiously optimistic near-term outlook: robust credit and demand metrics underpin growth, but external energy shocks remain the main tail‑risk to the trajectory it outlines.
