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KNews Desk– GDP figures for the first quarter of the financial year 2026-27 are going to be very important for the Indian economy. Economic indicators released ahead of data release on Monday, August 31, show that despite the ongoing conflict in West Asia, rising crude oil prices and inflationary pressures, the Indian economy remains strong. The Reserve Bank of India (RBI) has estimated GDP growth to be around 7 percent in the April-June quarter, while many economists believe that the growth rate could reach 7.5 to 8 percent.

The biggest indication of the strength of the Indian economy is coming from the increasing demand for bank credit. According to RBI data, by the end of June 2026, non-food credit of banks increased by 18.3 percent on an annual basis. This is the fastest credit growth at the end of the first quarter of a financial year since June 2012. This indicates that there has been an increase in the economic activities of companies and common people and the demand for loans for business expansion has increased. If we look at the sector-wise data, there has been an increase of 19.2 percent in bank loans given to industry, while bank credit to the service sector has increased by 21.4 percent and personal loans have increased by 15.8 percent. The growth rates of industry, service and personal loans in June 2025 were 6.3 percent, 8.8 percent and 11.7 percent respectively. That is, there has been a huge increase in credit demand especially in the industry and service sectors in the last one year.

According to economists, this change is important for the Indian economy. After the Corona epidemic, the share of personal loans in the demand for bank credit was high, but now the trend of loans is increasing towards industry and service sector. This means that companies are taking loans to increase production, make new investments and expand business. This is being considered a positive sign for economic activities. The increasing demand for credit in India is not an isolated story. According to Morgan Stanley, bank credit growth in Asia, excluding China, has reached 8.5 percent, the highest in nearly 18 years. Increasing capex in AI and digital infrastructure, energy, defense and industrial supply chain is considered to be the major reason for this growth. This indicates that the Asian economy is entering a strong industrial cycle.

The performance of the corporate sector has also strengthened the Indian economy. In the April-June quarter, sales of listed private non-financial companies increased by 19.4 percent on an annual basis. At the same time, an increase of 19.3 percent was recorded in the operating profit of the companies. The special thing is that this performance came at a time when due to the conflict in West Asia, the cost of raw materials had increased by 25.3 percent and electricity and fuel expenses had increased by 19.3 percent. Despite these challenges, the increase in sales and profits shows that domestic demand and manufacturing activities remain strong. However, the road ahead is not entirely easy. The conflict in West Asia, crude oil prices, inflation and global uncertainty may put pressure on the Indian economy. In such a situation, Q1 GDP data will be important in determining how strongly India has faced these external shocks. If GDP growth remains close to 7.5 to 8 percent, then it will be considered a big sign of the strength of the Indian economy.