SBI Capital Markets pegs India’s 2023 real GDP growth at 6 pc

NEW DELHI: SBI Capital Markets expects India’s real GDP growth for the current financial year 2023-24 to be 6 per cent, and noted that risks are evenly balanced. Nominal GDP growth, which is the growth unadjusted for inflation, is expected to ease to 10 per cent in 2023-24. In 2022-23, nominal GDP grew 16.1 per cent. Incorporated in 1986 as a wholly owned subsidiary of the State Bank of India, SBICAPS is one of the oldest investment banks in India. As per the provisional estimates released by the National Statistical Office (NSO) recently, real GDP growth for 2022-23 stood at 7.2 per cent, higher than the 7 per cent projected. An upward revision in the 2022-23 GDP numbers is expected going ahead. For 2023-24, the central government sees growth at about 6.5 per cent. Despite global headwinds and tighter domestic monetary policy tightening, various international agencies have forecasted India to be one of the fastest-growing economies in 2023-24, supported by robust growth in private consumption and sustained pick-up in private investment. “Real GDP for FY23 grew by 7.2 per cent y/y, above NSO’s 7.0 per cent estimate, helped by traction in the construction and agriculture sector. The latter was also reflected in government spending boosting gross fixed capital formation (GFCF) share in real GDP reaching 35.3 per cent, the highest since Sep’11 quarter,” SBI Capital Markets said in a report ‘ECOCAPSULEJune 2023’. Further, on India’s inflation outlook as projected by the RBI, the SBI arm SBI Capital Markets said it seems “realistic”. “RBI’s downwardly revised inflation projection for FY24 at 5.1 per cent seems realistic, subject to OPEC’s supply side machinations and El Nino’s impact on kharif production.” The Reserve Bank of India (RBI) has lowered India’s inflation projection for 2023-24 to 5.1 per cent against its April estimate of 5.2 per cent at its latest monetary policy review meeting.