The Indian economy is expected to have expanded between 13 and 15 per cent in the first quarter of the current fiscal largely due to a strong recovery in consumer demand, specifically in the services sector, says SBI Ecowrap and Icra reports.

The CSO will come out with its first-quarter GDP numbers on August 31. The growth in the June quarter is expected around 15.7 per cent with a large possibility of an upward bias because several indicators have shown good progress, the SBI Ecowrap report said.

“According to our (SBI) ‘Nowcasting Model’, the forecasted GDP growth for Q1 FY23 would be 15.7 per cent, with an upward bias,” the report added. If this materialises, SBI’s economic research department (ERD) expects an upside to RBI’s FY23 GDP projection of 7.2 per cent. “The high base of FY22 and the low base of FY21 has made the forecasting exercise a difficult one, with a large band around the mean estimates,” said Soumya Kanti Ghosh, group chief economic adviser of State Bank.

Meanwhile, Icra said it expects the June quarter growth to spike to a four-quarter high of 13 per cent, owing to a low base because of the second wave of the Covid-19 pandemic and robust recovery in contact-intensive services.

The ratings agency has projected the year-on-year growth of GDP and the gross value added (GVA) at basic prices (at constant 2011-12 prices) in Q1 FY2023 at 13 per cent and 12.6 per cent, respectively, a sharp jump from the 4.1 per cent and 3.9 per cent recorded in Q4 FY22. Icra expects the sectoral growth in Q1 FY23 to be driven by the services sector, followed by industry.

However, the GVA growth in agriculture, forestry and fishing is projected to decline to around 1 per cent in Q1 FY23 from 4.1 per cent in Q4 FY22, on account of the adverse impact of the heat wave in several parts of the country, which reduced wheat output. “The GDP benefits from the low base of the second wave of Covid-19 in India in Q1 FY2022 as well as the robust recovery in the contact-intensive sectors following the widening vaccination coverage,” Aditi Nayar of Icra said.