SBI revises up FY23 economic growth forecast to 7.5%

The report basis its optimism on the rising corporate revenue and profit and the growing bank credit coupled with ample liquidity in the system.

SBI Research has projected the Indian economy to grow at 7.5% in 2022-23, an upward revision of 20 basis points from its earlier estimate.

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

"Given the high inflation and the subsequent upcoming rate hikes, we believe that real GDP will incrementally increase by ₹11.1 lakh crore in FY23. This still translates into a real GDP growth of 7.5% for FY23, up by 20 basis points over our previous forecast," SBI chief economist Soumyakanti Ghosh said in a note on Thursday.

Nominal GDP expanded by ₹38.6 lakh crore to ₹237 lakh crore, or 19.5% annualised. In FY23 also, as inflation remains elevated in the first half, nominal GDP will grow 16.1% to ₹275 lakh crore, he said.

The report basis its optimism on the rising corporate revenue and profit and the growing bank credit coupled with ample liquidity in the system.

On rising corporate growth, the report notes that in FY22, around 2,000 listed companies reported 29% top line growth and 52% jump in net profit over the previous year.