SBI Research: Growth rate will be 7.5 percent this year, GDP size will increase by 16 percent

The growth rate of the Indian economy is likely to increase by 0.20 percent to 7.5 percent in 2022-23. During this period, the size of the GDP will also increase by 16.1 percent. SBI Research said in a report that because of high inflation and subsequent increase in interest rates, real GDP will increase by 11.1 lakh crore in the current financial year.

This represents a real GDP growth of 7.5 percent in 2022-23, 0.20% higher than our previous estimate. The size of GDP grew by Rs 38.6 lakh crore to Rs 237 lakh crore in 2021-22 at current prices, an increase of 19.5% year-on-year, the report said.

If inflation remains high in the first half of 2022-23, the size of GDP will increase by 16.1% this year to Rs 275 lakh crore at current prices. On the other hand, according to the recently released government data, the economic growth rate in 2021-22 was 8.7 percent. GDP increased by 11.8 lakh crore to Rs 147 lakh crore. However, it is only 1.5% higher than the financial year 2019-20 before the pandemic.

The Repo rate will increase by 0.50 percent by August

SBI Chief Economist Soumya Kanti Ghosh said that if crude oil prices remain above $ 120 per barrel, the inflation rate can be 6.5-6.7% in the current financial year. On the liquidity front, he said that the RBI will support economic growth by increasing the repo rate gradually. The repo rate may increase by 0.50% in the Monetary Policy Committee meeting to be held in June and August. The cash reserve ratio may also increase by 0.25% in June. It further states that the central bank can increase the repo rate by 1.25-1.5%, which was four percent during the Kovid period.

A fiscal deficit may reach 10.2%

UBS Securities said efforts to contain inflation by raising interest rates may push the fiscal deficit to a high of 10.2% of GDP in 2022-23. However, it will be 0.20 percent lower than a year ago. During this period, the fiscal deficit of the Center is estimated to be 6.4 percent and that of the states at 3.4 percent.

UPI: 10 lakh crore transaction for the first time

For the first time, transactions worth Rs 10 lakh crore have taken place through the Unified Payments Interface (UPI). According to NPCI, 595 crore transactions were done through UPI in May. In April it was 558 crores. Transactions crossed Rs 5 lakh crore in May 2021. Transactions worth Rs 77.5 lakh crore took place in 2021-22.

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