India’s GDP growth likely to fall below 6%: CII

03 Sep 2012 Evaluate

With the slowing economy and growing pessimism among majority of chief executive officers (CEOs), a snap poll conducted by the Confederation of Indian Industry (CII) reveals that the gross domestic product (GDP) growth is likely to fall below 6 per cent in the current fiscal and will be in the range of 6 to 6.5 per cent in 2013-14. CII points that most of the industry leaders are pessimistic about the outlook on the economy in the current year and expect only a moderate recovery in the forthcoming year.

It reveals that about 44% of respondents expect the GDP growth during 2012-13 to remain below 6% while no one expects it to cross 7%. Though, another 44% hopes that it will remain between 6 and 6.5%. With less hope for the scenario to improve by 2013-14, more than 52% polled that the GDP growth for the year between 6 to 6.5%, albeit only 36% anticipated it in between 6.5% and 7.5%.

About inflation, 56% CEOs expect the average rate of inflation in 2012-13 to be in the range of 7-8%, while 32% of the respondents expect it to be between 6-7%. Only 12% hopes it to go between 8-9%. These expectations are in line with the 7% inflation projected by the Reserve Bank of India (RBI). More than 80% of respondents expect both domestic and international investment either to increase or remain unchanged during 2012-13.

And, almost half of the respondents expect domestic investment to pick up as compared to 43% in case of international investment. Additionally, 75% of the respondents believe capacity utilization will either increase or remain unchanged in 2012-13.