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India's FY23 GDP Growth Likely To Surpass 7%, Manufacturing Sector To Rebound

For 2023-24, RBI is projecting GDP growth at 6.5 per cent with Q1 is pegged at 7.6 per cent

Photo Credit : Stock


The State Bank of India (SBI) on Friday said that gross domestic product (GDP) growth in financial year (FY) 2023 is likely to surpass 7 per cent and the manufacturing sector is all set to rebound. 

Amid the fear of economic slowdown across the globe, SBI in its ecowrap report added that quarter four (Q4) FY23 GDP growth is at 5.5 per cent. 

For 2023-24, RBI is projecting GDP growth at 6.5 per cent with Q1 pegged at 7.6 per cent. 

SBI’s artificial neural network (ANN) model, based on 30 high-frequency indicators from key sectors and tuned/trained to project the GDP numbers forecasts the quarterly GDP growth for Q4FY23 at 5.5 per cent.

The union budget 2023-24’s emphasis on capital expenditure is expected to crowd in private investment, strengthen job creation and demand, and raise our growth potential. 

RBI has estimated Q4FY23 Real GDP growth to be 5.1 per cent and full-year FY23 estimates by NSO is 7.0 per cent. 

"Amidst this global hullabaloo, India is expected to continue its showdown in pursuing a different pathway of zeroing in on drivers of growth, looking for a renewed surge in resilient manufacturing while supporting the services sector to embrace enhanced efficiency," it added. 

Locally, domestic consumption and investment stand to benefit from stronger prospects for agricultural and allied activities, strengthening business and consumer confidence and strong credit growth while supply responses and cost conditions are poised to improve as inflationary pressure is easing. 

International Monetary Fund's (IMF's) world economic outlook report in April 2023 revised the baseline growth forecast from 3.4 per cent in 2022 to 2.8 per cent in 2023, before settling at 3.0 per cent in 2024. 

Advance estimates (AEs) are expected to see an especially pronounced growth slowdown, from 2.7 per cent in 2022 to 1.3 per cent in 2023. 

Surprisingly, China’s GDP is expected to witness a rebound, growing at 5.2 per cent in 2023 and 4.5 per cent in 2024, compared to 3.0 per cent in 2022. 

"Given the intensity/level of distrust towards the mainland from the global community, could China use its pricing prowess in bulk manufacturing as a hook to lure the corporates, playing along their quest for maintaining stronger bottom lines on a quarterly basis? Such a recourse, if it gains winds, would sure be a checkmate to the genuine efforts made in last 2-3 years to isolate the country, highlighting its vile intentions," it added.    

The SBI also added that global headline inflation in the baseline case is set to fall from 8.7 per cent in 2022 to 7.0 per cent in 2023 on the back of lower commodity prices though underlying (core) inflation is likely to decline more slowly. 

Meanwhile, India Inc. continues to front-lead the economic turnaround while embracing better operational and financial efficiency. 

In Q4FY23, around 1700 listed entities reported top line growth of 12, while PAT grew by around 19 per cent as compared to the same period previous year. The same set of companies reported earnings before interest, taxes, depreciation and amortization (EBIDTA) growth of around 23 per cent in Q4FY23.

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india indian economy gdp growth manufacturing sector