The country's GDP (gross domestic product) is expected to grow at 7.1% in FY23, according to the latest report by SBI Ecowrap. This is in line with the second advance estimates released by National Statistical Office (NSO) in February, which projected the country’s real GDP at 7% in FY23. This week, the RBI (Reserve Bank of India) said India's GDP growth for FY23 could be above the 7% estimate.
For Q4 FY23, SBI projects the country's GDP will grow at 5.5%. The RBI has estimated Q4 FY23 real GDP growth to be at 5.1%. Meanwhile for FY24, SBI projects GDP growth between 6.2% to 6.3%. The RBI has projected GDP growth for FY24 to be at 6.5% with Q1 at 7.6%.
According to the report, global activity has continued to show resilience, supported by robust service sector expansion. IMF (International Monetary Fund) in World Economic Outlook (WEO) April 2023 has revised the baseline growth forecast from 3.4% in 2022 to 2.8% in 2023, before settling at 3.0% in 2024. Asian Economies are expected to see an especially pronounced growth slowdown, from 2.7% in 2022 to 1.3% in 2023. India's growth is estimated to fall from 6.8% in 2022 to 5.9% in 2023 and 6.3% in 2024, says the report.
Global headline inflation in the baseline is set to fall from 8.7% in 2022 to 7.0% in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly.
The report says the country's domestic consumption and investment stand to benefit from stronger prospects for agricultural and allied activities, strengthening business and consumer confidence, and strong credit growth. Supply responses and cost conditions are poised to improve as inflationary pressure is easing.
Meanwhile, India Inc. continues to front-lead the economic turnaround while embracing better operational and financial efficiency. SBI Ecowrap says in Q4FY23, around 1,700 listed entities reported top-line growth of 12%, while PAT (profit after tax) grew by around 19% as compared to the same period the previous year. The same set of companies reported EBIDTA growth of around 23% in Q4FY23.
"Corporate results, ex BFSI, for Q4FY23 shows both top-line and bottom-line growth of around 10%, while EBITDA grew by 7% as compared to Q4FY22. Further, it is pertinent to mention that the corporate margin, which was continuously under pressure for the last few quarters, showed signs of improvement in Q4FY23. As reflected in results of around 1500 listed entities ex BFSI, EBITDA margin, on an aggregate basis, improved from 13.96% in Q4FY22 to 14.34% in Q4FY23," says the report.
Earlier this week, RBI Governor Shaktikanta Das said all economic indicators in the Q4 of last financial year show that economic activity sustained momentum, whereas high-frequency indicators also maintained momentum.
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