India’s gross domestic product (GDP) growth rate in the April-June quarter of the ongoing fiscal is expected at 15.7 percent due to the low base effect and consumption boost post easing of Covid restrictions, says the latest SBI Ecowrap report.
The progress in the economy is seen despite global spillovers, elevated inflation and some slackening of external demand as geopolitical developments take their toll on world trade.
“Growth is expected to be about 15.7 per cent with a huge possibility of an upward bias on account of various indicators showing good progress in the Indian economy,” the report said. The government will announce the first quarter GDP numbers on August 31.
“Importantly, private final consumption expenditure in real terms that had declined significantly by Rs 4.77 lakh crore in Q1FY21 owing to COVID-19 pandemic recovered by 46 per cent in Q1FY22. It remains to be seen how the remaining 54 per cent pent up demand recovered in Q1FY23,” it stated.
It is likely to be more than 54 per cent, indicating a strong recovery in consumer demand, specifically in services which have helped in the likely strong Q1FY23 numbers, the report said. This also accounts for 6.8 per cent of the total GDP contribution in Q1FY23, it further said.
As per ICRA also, India’s GDP growth in the first quarter of the current fiscal is likely to grow in double digits at 13 percent due to the low base and significant recovery in the contact-intensive sectors following the large vaccination coverage.
The sectoral growth in Q1 FY2023 is likely to be driven by the services sector, followed by the industry, said ICRA.
Gross Value Added (GVA) growth in agriculture, forestry and fishing is projected to decline to 1.0 per cent in Q1 FY2023 from 4.1 per cent in Q4 FY2022, owing to heat waves in several parts of the country, which suppressed wheat production, it added.
