A survey of RBI-sponsored Professional Forecasters on Macroeconomic Indicators, coming much in line with the cautiousness raised by the RBI governor during the Second Bi-monthly Monetary Policy Statement, 2015-16, has said that the economy is expected to grow at a rate of 7.8 percent in the current fiscal, a shade lower than earlier forecast of 7.9 percent.
Twenty seven professional forecasters who participated in the latest survey round (Round 34) conducted in May 2015, expect real Gross Value Added at basic price (GVA) to increase by 7.8 percent in 2015-16, and ‘Agriculture and Allied Activities’ and ‘Services’ to grow by 2.2 percent and 10 percent, respectively.” The survey released in April had projected the GVA to increase by 7.9 percent in 2015-16. The professionals in the latest survey viewed that the 'industry' would grow by 6.2 percent in the current fiscal.
As per the survey, Central Government’s gross fiscal deficit (GFD) is projected at 3.9 per cent of GDP in 2015-16 and is expected to moderate to 3.5 per cent of GDP in 2016-17. The combined GFD of Central and State Governments is projected at 6.5 per cent of GDP in 2015-16 and is expected to improve to 6.2 per cent of GDP in 2016-17.
The forecasters expects that the private final consumption expenditure at current prices to increase by 12.7 per cent in 2015-16 and further by 13.1 per cent in 2016-17, while the Gross Saving rate is projected at 30.8 per cent of Gross National Disposable Income (GNDI) in 2015-16 and 31.0 per cent of GNDI in 2016-17. The forecasters expect Gross Fixed Capital Formation rate at 28.8 per cent of GDP in 2015-16, which is expected to improve to 29.4 per cent of GDP in 2016-17.
Regarding inflation, the forecasters expect core CPI (excluding food and fuel) to remain above 5.0 per cent from Q3:2015-16. CPI (Combined) headline inflation forecast has been cut between 20 bps to 40 bps in the current round from the previous round. Headline inflation is expected to increase from 5.0 per cent in Q1:2015-16 to 5.5 per cent in Q1:2016-17. Forecasters assigned maximum probability of 70 per cent (based on average of individual forecasts) that CPI headline inflation will be in the range 5.0-5.9 per cent in March 2016. Based on this probability distribution, the implicit CPI inflation rate for March 2016 is expected at 5.6 per cent.
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