India GDP to grow by 13-15.7% in FY23: Reports

India’s Gross Domestic Product (GDP) growth is expected to grow in double digits at 13% in the first quarter (Q1) of FY23, driven by a low base, expansive vaccine coverage, and the strong recovery of contact-intensive sectors, according to  a report by rating agency ICRA. 

ICRA said that Q1’s sectoral growth for this fiscal will be driven by the services sector—with an additional 17-19% increase and an added growth of 5.5% in the fourth quarter of FY22, followed by industry, which will grow by 9-11% and 1.3% in Q1 FY23.

Another report by The State Bank of India said the country’s GDP is expected to grow in the same period but at 15.7%, due to an upward bias caused by several indicators experiencing an uptick. 

According to SBI’s Composite Leading Indicator (CLI), a basket of 41 leading indicators, which includes parameters from almost all the sectors based on monthly data, GDP growth shows early signals of turning points in the economic activity. Out of the 41 high frequency leading indicators, 89% are showing acceleration, compared to 75% acceleration in FY22

The growth of Gross Value Added (GVA) at basic price for Q1 FY23, as per ICRA, is projected to be at 12.6% compared to 3.9% previously. GVA’s growth in transport, trade, hotels, communication and services related to broadcasting is expected to witness a base-effect driven expansion of 40-45% in Q1 FY23, and an added 5.3%in Q4 FY22, while trailing the pre-Covid levels at 2.5%.

Reports also claim that expenditure for private final consumption had decreased by INR 4.77 lakh crore in Q1 FY21 due to the pandemic, however, it recovered by 46% during the same quarter in FY22. About 54% of the pent-up demand has recovered in Q1, this year, indicating a healthy recovery in consumer demand.