The country’s real GDP growth in the first quarter will be better than the Reserve Bank’s estimate of 8 percent, economists said on Tuesday.

Economists at the country’s largest lender SBI pegged the growth at 8.3 percent while domestic rating agency Icra estimated it to come even higher at 8.5 percent.

The Reserve Bank of India (RBI), which expects the GDP to grow at 6.5 percent in FY24, has estimated a growth of 8 per cent in the April-June period.

Official data on growth will be released later this month. In the preceding March quarter, the real GDP had grown at 6.1 per cent as compared to the year-ago period.

Both SBI and Icra credited capital expenditure by the Centre and states for their expectations of faster economic growth.

The rating agency also said that the lower base — the GDP had contracted by nearly a fourth in the first quarter of FY21 — as a helping factor.

A note by Soumya Kanti Ghosh, the group chief economic adviser at SBI, said the largest lender has tracked 30 high frequency indicators to come at the estimate of 8.3 per cent.

“There has been a surge in capital expenditure in Q1, with the central government spending 27.8 per cent of budgeted, while states at 12.7 per cent of budgeted,” the note said.

States like Andhra Pradesh, Telangana and Madhya Pradesh where elections are due have registered capital expenditure growth of up to 41 per cent, it added.

Contributions of the services sector — which has continued to deliver higher growth — were also mentioned by SBI and Icra.

They also hinted at widening profit margins in the corporate sector as a tailwind which is benefitting the growth prospects.

However, they diverged on their views on the economic growth for the entire fiscal, with SBI estimating the FY24 growth at 6.7 per cent while Icra projecting it will come in at 6 per cent, which is much below the RBI estimate.

Icra’s chief economist Aditi Nayar said the second half of the fiscal is likely to witness headwinds, which will prove a dampener.

Nayar said erratic rainfall, narrowing differentials with year-ago commodity prices, and possible slowdown in momentum of the government capex as the country approaches the Parliamentary elections will limit the growth.

In its June quarter estimates, SBI also mentioned about the continued high credit growth and the ability of the banks to persist with the same given their lean balance sheets, as being beneficial to the growth process.