SBI GDP forecast of 7.5% for FY 23 rides on growth of Construction and Personal Loan segments

Mumbai, June 2 (KNN) According to the SBI research report, the Indian economy is likely to grow at 7.5 cent in 2022-23. The SBI chief economist Soumyakanti Ghosh has pointed out that “given the high inflation and the subsequent upcoming rate hikes, we believe that real GDP will incrementally increase by Rs 11.1 lakh crore in FY23.”

This still translates into a real GDP growth of 7.5 per cent for FY23, up by 20 basis points over our previous forecast, he added.

As per the report, the economy grew by 8.7 per cent in FY22, net adding Rs 11.8 lakh crore in the year to Rs 147 lakh crore, the report said, adding this was however only 1.5 per cent higher than the pre-pandemic year of FY20.

In FY22, around 2000 Corporates, in listed space, reported 29 per cent growth in top line and 52 per cent growth in profit after tax (PAT) as compared to the year before.

The construction sectors including cement, steel etc. showed notable growth in both revenue as well as PAT. The construction and steel sectors reported growth of 45 per cent and 53 per cent respectively in revenue in FY22 as compared to FY21.

The sector-wise data for April Indicate that credit off-take has happened in almost all sectors. Personal loans segment continued to perform well, registering acceleration in growth to 14.7 per cent in April 2022 and contributes around 90 per cent of the incremental credit during the month, primarily driven by ‘Housing’, ‘Vehicle Loans’ and ‘Other Personal Loans’ segments.

It is expected that RBI will be supportive of growth and hike repo rates gradually, but mostly frontload it in June and August policy. Specifically, core liquidity in the banking system has declined from Rs  8.3 trillion in the beginning of the year to Rs  6.8 trillion. Net LAF absorption has declined from Rs 7.5 trillion to Rs 3.3 trillion during the same period.

The projection made by the SBI is in sync with the central bank. However, the finance ministry had said rising crude oil prices are hurdles in India's aim to achieve 8 per cent GDP in FY23.  (KNN Bureau)