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India's GDP is expected to be much higher in Q1FY23 and growth is expected around 15.7 per cent with a large possibility of an upward bias because several indicators have shown good progress in the Indian economy, SBI Ecowrap report said.

"As per our (SBI) 'Nowcasting Model', the forecasted GDP growth for Q1 FY23 would be 15.7 pr cent, with an upward bias," the report added.

The progress in the economy is seen despite global spillovers, elevated inflation and some slackening of external demand as geopolitical developments take their toll on world trade.

Domestically, an intense heatwave in major regions limited economic activity in the earlier months. Despite this, most of the high frequency indicators showed improvement, especially in the services sector activity. There were also significant improvements in the domestic supply delivery time, backlogs and decline in truck freights, which was reflected in the fall of index of supply chain pressures for India.

GDP Growth as per SBI composite leading indicator (CLI), a basket of 41 leading indicators, which includes parameters from almost all the sectors based on monthly data, shows early signals of turning-points in the economic activity. Out of the 41 high frequency leading indicators, 89 per cent are showing acceleration, compared to 75 per cent acceleration in FY22.

Private final consumption expenditure in real terms that had declined significantly by Rs 4.77 lakh crore in Q1FY21 owing to Covid-19 pandemic recovered by 46 per cent in Q1FY22. It remains to be seen how the remaining 54 per cent pent up demand recovered in Q1FY23. We believe it is likely to be more than 54 per cent, indicating a strong recovery in consumer demand, specifically in services which has helped in the likely strong Q1FY23 numbers.