Categories: Economy

India’s GDP Growth Projected at 7.1% in FY23: SBI Ecowrap Report

The latest report by SBI Ecowrap indicates that India’s GDP (gross domestic product) is expected to grow at a rate of 7.1% in FY23, aligning with the second advance estimates released by the National Statistical Office (NSO) in February. This projection is in line with the Reserve Bank of India’s (RBI) recent statement suggesting that GDP growth for FY23 could surpass the 7% estimate. The report also provides insights into the anticipated growth for Q4 FY23 and FY24, as well as global economic trends and India’s domestic business performance.

Steady Growth Predicted for FY23

According to the SBI Ecowrap report, India’s GDP is projected to grow at a rate of 7.1% in FY23. This estimate aligns with the NSO’s second advance estimates released earlier this year, affirming the resilience of India’s economic recovery. The RBI has also indicated that the GDP growth for FY23 may exceed the 7% estimate.

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Q4 FY23 GDP Growth Expectations

The SBI report projects India’s GDP to grow at a rate of 5.5% in the fourth quarter of FY23. In comparison, the RBI’s estimate places the Q4 FY23 real GDP growth at 5.1%. These projections highlight a continued positive trajectory for India’s economy, albeit with a slightly conservative outlook from the central bank.

Outlook for FY24

Looking ahead to FY24, SBI projects GDP growth between 6.2% and 6.3%. Meanwhile, the RBI’s forecast places the GDP growth for FY24 at 6.5%, with a particularly strong first quarter expected at 7.6%. These projections indicate sustained economic expansion and showcase the confidence in India’s recovery.

Global Economic Trends

The SBI Ecowrap report emphasizes that global economic activity has shown resilience, supported by a robust expansion in the service sector. However, the International Monetary Fund (IMF) revised its growth forecast for Asian economies, including India, to reflect a slowdown. India’s growth rate is estimated to decline from 6.8% in 2022 to 5.9% in 2023, before rebounding to 6.3% in 2024.

Inflation Outlook

The report suggests that global headline inflation is set to decrease from 8.7% in 2022 to 7.0% in 2023 due to lower commodity prices. However, underlying (core) inflation is expected to decline at a slower pace. This indicates that inflationary pressure is easing, potentially benefiting domestic consumption and investment.

India Inc.’s Resilience

The SBI Ecowrap report highlights the impressive performance of India Inc. in driving the economic turnaround while embracing operational and financial efficiency. In Q4 FY23, approximately 1,700 listed entities reported a 12% growth in top-line, a 19% increase in profit after tax (PAT), and a 23% growth in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to the same period in the previous year. Additionally, corporate results (excluding banking, financial services, and insurance sectors) for Q4 FY23 indicate a 10% growth in both top-line and bottom-line, with a 7% increase in EBITDA compared to Q4 FY22.

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Piyush Shukla

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