New Delhi, June 2
SBI Research forecast India’s economy to grow by 7.5% in 2022-23, an upward revision of 20 basis points from its previous estimate.
According to official data, the economy grew by 8.7 percent in FY22, adding a net 11.8 crore lakh rupees during the year to 147 crore lakh rupees, according to the report, adding that, however, was only 1.5% higher than the pre-pandemic year of FY20.
- The economy grew by 8.7% in FY22, adding net Rs 11.8 lakh crore in the year to Rs 147 lakh crore
- Nominal GDP increased from Rs 38.6 lakh crore to Rs 237 lakh crore or 19.5% annualized
- Also in FY23, as inflation remains high in H1, nominal GDP will grow by 16.1% to Rs 275 lakh crore
“Given high inflation and upcoming rate hikes, we expect real GDP to grow gradually by Rs 11.1 lakh crore in FY23. This still translates to real GDP growth of 7.5% for FY23, up 20 basis points from our previous forecast,” SBI Chief Economist Soumyakanti Ghosh said Thursday.
Nominal GDP increased from Rs 38.6 lakh crore to Rs 237 lakh crore or 19.5% annualized. Also in FY23, as inflation remains elevated in the first half of the year, nominal GDP will expand by 16.1% to Rs 275 lakh crore, he said.
The report bases its optimism on rising corporate revenues and profits and growing bank credit coupled with ample liquidity in the system.
On increasing business growth, the report notes that in FY22, about 2,000 listed companies recorded 29% revenue growth and 52% increase in net profit compared to to the previous year.
The construction sectors, including cement and steel, recorded impressive growth in both turnover and net profit with 45% and 53% increase in turnover respectively.
Interestingly, the backlog position remains strong, with construction major L&T reporting a 9% growth in the backlog position to Rs 3.6 lakh crore in March, supported by a 10% growth in inflow of orders of Rs 1.9 lakh crore in FY22 and Rs 1.7 lakh crore in FY21.
Similarly, sectoral data for April indicates that credit drawdown occurred in almost all sectors, led by personal loans, recording a peak in demand of 14.7% in April.