SBI Report: 7.5 percent growth forecast for the financial year 2022-23, RBI may increase the repo rate

Posted on 2nd Jun 2022 by rohit kumar

SBI Report: State Bank of India, the country's largest state-run bank, has come out with its research report, in which the growth estimate of the Indian economy in the financial year 2022-23 has increased by 0.2 percent and it has been estimated to be 7.5 percent. State Bank of India's (SBI) research team 'SBI Research' has said in its report that this time 0.20 percent higher economic growth rate is being estimated than the previous estimate.

 

The growth rate of the economy was 8.7 percent in the financial year 2021-22

 

According to official data, the growth rate of the economy was 8.7 percent in the financial year 2021-22. During this, the Gross Domestic Product (GDP) increased by Rs 11.8 lakh crore to Rs 147 lakh crore. However, this is only 1.5 percent more than the financial year 2019-20 before the pandemic.

 

Statement of SBI Chief Economist Soumyakanti Ghosh

 

SBI Chief Economist Soumya Kanti Ghosh said in a note, "Given the high inflation and the likely rate hike thereafter, we are of the view that the real GDP growth in FY 2022-23 will be Rs 11.1 lakh crore. This represents a real GDP growth of 7.5 percent, which is 0.20 percent higher than our previous estimate."

 

The size of GDP will increase at current prices

 

As far as the size of GDP at current prices is concerned, it has increased by Rs 38.6 lakh crore to Rs 237 lakh crore in 2021-22, showing a growth of 19.5 percent year-on-year. Ghosh said GDP at current prices will grow 16.1 percent this year to Rs 275 lakh crore in the first half of FY 2022-23 amid fears that inflation will remain elevated.

 

stock market gains

 

According to the report, about 2,000 companies listed on the stock exchange registered a 29 percent increase in revenue in the fiscal ended fiscal year, while their profit increased by 52 percent compared to a year ago.

 

RBI may increase the repo rate

 

On the liquidity front, this report says that the Reserve Bank of India (RBI) will support economic growth by gradually increasing the repo rate. RBI may increase the repo rate by 0.50 percent during the monetary policy reviews to be held in June and August. At the same time, an increase of 0.25 percent in the Cash Reserve Ratio (CRR) is expected in June.

 

RBI may also increase CRR

 

It has been estimated in the report that the RBI may increase the repo rate, which was at four percent during the Kovid period, by a total of 1.25-1.50 percent. RBI has increased the repo rate by 0.40 percent in May. According to SBI Research, the central bank can again increase the CRR by up to 0.50 percent. It had increased the CRR by 0.50 percent last month as well.

 

Inflation expected to be 6.5-6.7 percent

 

The report says that due to crude oil prices remaining above $ 120 per barrel, the inflation rate can be 6.5-6.7 percent in the current financial year. This report also takes into account the increased revenue and profit of companies and the sufficient cash in the system along with increasing bank loans.

 

Also Read: GDP Growth: The country's GDP grew at the rate of 8.7 percent in the financial year 2021-22, know what was the condition of the fourth quarter