GDP for Q4 (January-March) FY23 is projected to grow at 5.5 per cent, while GDP growth for FY23 is likely at 7.1 per cent, according to State Bank of India’s ANN (Artificial Neural Network) model.

The quarterly projection is higher than the Reserve Bank of India’s Q4FY23 real GDP growth estimate of 5.1 per cent. The full-year projection is a shade higher than the National Statistical Office’s 7 per cent estimate.

State Bank of India’s ANN (Artificial Neural Network) model is based on 30 high frequency indicators from key sectors.

Referring to variegated patterns of growth emerging across the globe and inflation trajectory management for central banks being elongated, SBI’s economic research department, in its report Ecowrap, said India is expected to pursue 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.

“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,” said Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.

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, he added.

Ghosh observed that India Inc continues to lead the economic turnaround, while embracing better operational and financial efficiency.

In Q4FY23, around 1,700 listed entities reported top line growth of 12 per cent, while net profit grew by around 19 per cent as compared to the same period in the previous year.

The same set of companies reported EBIDTA (earnings before interest, taxes, depreciation, and amortization) growth of around 23 per cent in Q4FY23.

“Green shoots are also emerging on foreign capital inflows in capital markets, with YTD (year-to-date) FII inflows in FY24 touching $6 billion, a reversal of trend from 2022.

“Start-up financing has been hit due to banking turmoil in the US, in particular the failure of niche banks, though it also offers domestic FIs a pedestal to ring fence the financial needs of these changelings internally to ensure the sweet spot enjoyed by India grows in a disruptive and disproportionate manner,” Ghosh.